Setting Up an Accounts Receivable Process

Tracking receivables is an essential part of managing your company's cash flow. Without a steady cash flow, many small businesses tend to borrow more and more money to meet their working-capital needs.

How companies manage accounts receivable differs, but accounts receivable processes generally allow you do three things:

• Record your daily sales and receipts.
• Generate customer invoices and monthly statements.
• Track customers' current and past-due balances.

When you set up your accounts receivable process, don't ignore these important issues:

Accounting software. Software can simplify the receivables process and provide you with additional forecasting, invoicing and tracking tools. Many small companies, especially ones with large amounts of receivables, use programs such as QuickBooks, CheckMark MultiLedger and M.Y.O.B. Accounting to handle their accounts receivable and other accounting needs.