Chapter 5

How to manage accounts receivable

Many businesses issue invoices, and those invoices need to be tracked. Learn how to manage accounts receivable.

What is accounts receivable?

Accounts receivable involves invoicing customers and tracking payment of those invoices. It often requires you to follow up on overdue payments.

Why does it matter?

You’re not a charity. You need to get paid. Fail to manage accounts receivable correctly and your business will rapidly run out of money.

How to manage accounts receivable

  • Decide how long customers will have to pay your invoices and commit it to writing
  • Share and agree on those payment terms before doing business with anyone new
  • Create and send invoices as soon as a sale is agreed (include the agreed payment terms on the invoice)
  • Watch your bank account for payment and follow up immediately if they miss the due date

You can get more tips on accounts receivable in our Invoicing Guide.

Modern accounts receivable

Invoices can be created quickly on apps and sent with immediate payment options like credit and debit cards. Smart software can even check your bank for payments and keep a watchlist of unpaid invoices for you.

Disclaimer

Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.

How to do bookkeeping

Bookkeeping includes everything from basic data entry to tax prep. Let’s look at the core jobs and see how they’re done.

  1. How to do bookkeeping

    Small businesses can do their own bookkeeping or outsource to professionals. We look at how to find a good balance.

  2. Setting up a chart of accounts

    Stepping up to do the bookkeeping in a new business? You may have to set up the chart of accounts. Let’s look at how.

  3. How to do bookkeeping data entry

    Data entry is the foundation of bookkeeping. Enter the numbers right and you’ll learn exactly how the business is doing.

  4. How to do bank reconciliation

    Humans aren’t always perfect at punching numbers. Bank reconciliation is a way to do quality control on your books.

  5. How to manage accounts receivable

    Many businesses issue invoices, and those invoices need to be tracked. Learn how to manage accounts receivable.

  6. How to manage accounts payable

    Paying bills isn’t glamorous. But they’re debts and need to be dealt with. Let’s look at how to manage accounts payable.

  7. Creating monthly financial reports

    There are dozens of financial reports that you could create. But there are some monthly mainstays that bookkeepers love.

  8. How to do payroll

    If all you had to do was pay staff, it would be easy. But there’s more to it than that. Let’s look at how to do payroll.

  9. How to prepare tax returns

    Tax returns can be hard for small business owners. There are deadlines to make, and rules to follow. Let’s take a look.

  10. Using bookkeeping software

    Whether you do a lot of your own bookkeeping or outsource it all, software can help you save your time and budget.

  11. Using professional bookkeeping services

    If you don’t have the time or confidence to take on bookkeeping, a professional can help. Let’s look at what they do.

Download the guide on how to do bookkeeping

Learn about the eight core bookkeeping jobs, from data entry to reporting and tax prep. Fill out the form to receive the guide as a PDF.

Start using Xero for free

Access Xero features for 30 days, then decide which plan best suits your business.

  • Included
    Safe and secure
  • Included
    Cancel any time
  • Included
    24/7 online support