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Business owners should be reviewing their Accounts Receivable aging summary to look for any negative numbers that might show up. The reason why, is because a negative number usually indicates that a business owner has either paid a deposit, or has overpaid an invoice. Part-time CFO services says that it is not unheard of for businesses to pay a deposit, or have prepaid however, since this is not a typical thing to see on an AR summary, it is a indicator for business owner to check. If a business owner cannot verify that a client has either overpaid or pay to deposits, they can be sure that it is an error that needs to be fixed.
When possible reason why a negative number appear on Accounts Receivable aging summary as an error, would be if a mistake was made entering that payment into their QuickBooks software. Part-time CFO services says that business owners need to not only enter in a payment into QuickBooks, but also apply that payment to a specific invoice. The negative number could potentially appear, when a business owner has entered the payment and not applied it to an invoice. They can easily fix that and ensure that the Accounts Receivable aging summary is accurate.
Other things for business owners to review on their Accounts Receivable aging summary, is any instances that they see goal and round numbers. Part-time CFO services says that this should cause a business owner to review that invoice, because especially with taxes that need to be applied onto invoices, it is unlikely that there are many invoices the end up with a completely whole number with no sense. A possible reason for this error, could be when an entrepreneur accidentally invoices an estimate that they have done for client, or an accrual.
In order for business owner to ensure that they have the most up-to-date Accounts Receivable summary possible, they can get their part-time CFO services to help them learn how to update their own QuickBooks with all of their invoices and payments as they are received. It might be too difficult and too time-consuming for business owner to updates all of their accounting into QuickBooks, but taking care of these two things, can help a business owner have the most up-to-date Accounts Receivable summary, so that any time they want to make collection calls, they will have the most up-to-date information.
By being able to fix errors, as well as updates their Accounts Receivable summary, part-time CFO services says that entrepreneurs can have the information any time they need to send out to their clients. This way, they can ensure that they are maintaining a positive cash flow in their business, and there proactively avoiding running out of money in their business.
It is extremely important that business owners are very proactive in making collection calls to their clients says part-time CFO services. The second most common reason for businesses to fail in Canada is that they run out of money in their business. By establishing early on in their business, a great procedure for collecting on outstanding invoices, business owners can ensure that they are maintaining a positive cash flow in their business, and are able to collect on all of the money that they are owed, so that they can pay their own bills and staff.
Business owners should know how to review their Accounts Receivable aging summary, and what it looks like, so that they can catch errors that they might find. The more familiar they are with the statements, and the more often they review them, the better they will be at spotting mistakes that they can fix to ensure the accuracy of the information. Something that business owners should be looking for when they review their statement says part-time CFO services, is anything listed as shareholder. The Accounts Receivable aging summary is a place for business owners to have a list of all of the clients that hold the money, there should not be anything listed for shareholder at all on this summary. In fact, a business owner should ensure that everything that is shareholder related should be entered into their shareholders loan account. This will help their accountant at the end of the year ensure that they have the most accurate financial statements possible. Any time the business owner sees something listed shareholder, they should ensure that they get it fixed right away.
Business owners should also be aware of anything that is listed in their Accounts Receivable aging summary as CRA, or payroll. Part-time CFO services says an example of this would be something listed as payroll liability account, payroll expense account, or CRA overpayments. Both payroll as well as CRA amounts should have listings elsewhere in the financial statements of the business and not on an Accounts Receivable summary says part-time CFO services. Business owners should be verifying that all of the amounts that are listed in the summary are actual amounts that are owed them by real customers, and are real amounts of money that they expect to get into their business. This way, when a business owner looks at the grand total on the reports, they can be certain that that is the amount of money that they are expecting to receive into their business.
When business owners review their Accounts Receivable aging summary, thing aware of common errors can help them fix those errors, not just to maintain the integrity of their AR summary, but to help them have more accurate financial statements that can impact the accuracy of those reports. By doing this, business owners can ensure that they have accurate information and can make collection calls as often as they need.
