Most 5 star CPA Google reviews in Canada
Helping Canadian businesses beat the odds!
There are several things that business owners can look at on their Accounts Receivable aging summary to help them keep the summary accurate and current. One of the first things they should look for, is any amount that is not directly related to a customer. Part-time CFO services says these might be listed as shareholder, or related party, or they might be listed as payroll or CRA in the summary. None of these should exist on and Accounts Receivable aging summary, because they all have their own place elsewhere in the financial statements of the business. Shareholder information should stay in the shareholders loan account, is that it is easy for business owners and their accountants to look up all of the shareholders information. By ensuring this information gets removed from the summary, and put back into the remaining financial statements of the business, that only can help keep the integrity of the Accounts Receivable aging summary, but the rest of the financial statements as well.
When way that business owners can be confident that the accuracy of the information in their summary, is learn how to update Accounts Receivable information in their accounting software in real time. This way, they do not have to put down their part-time CFO services to update it once a week or once every two weeks, business owners can take care of this aspect themselves, so that they can be sure any time they look at their AR aging summary, it is up-to-date. The way they can do that, is learn how to upload any invoice they create directly into their accounting software. As well, they can learn how to enter in payments, and apply them to invoices as soon as they are received. It may not be practical to expect a business owner to update other financial information, but keeping their Accounts Receivable current can ensure that any time a business owner needs to review that summary, it is accurate.
The reason why it is important to ensure the accuracy of the information, is because business owners should be reaching out to their clients to pay bills on a regular basis. Part-time CFO services recommends sending out a monthly statement, but as well they should be calling their clients every two weeks for payment. As well, if an account is past due for over ninety days, or if a business owner thinks that there customers going to be hard to collect like they are not returning phone calls, they should be confident enough to call their client on a daily basis to pay that invoice.
By being diligent in ensuring their aging summary is current, and calling their clients on a regular basis, business owners can help collect the money that they are owed in their business. Doing this can help them avoid running out of money in their business, which can help them be successful in grow.
It is important that entrepreneurs get into the habit early on in their business, to be reviewing their Accounts Receivable aging summary says part-time CFO services. They should be reviewing them not only to keep track of all of the clients that over the money, but also to review to catch any errors or mistakes that might exist on the summary. Having the most accurate and up-to-date AR summary can help business owners be confident in sending out statements, and calling their clients to collect money that they are owed.
An extremely easy way for business owners to review their summary to minimize errors, is to simply look for any negative numbers that might exist on their summary. When an entrepreneur invoices their client, it shows up on they Accounts Receivable aging summary as a positive number says part-time CFO services. When a client pays the invoice, it will show up as a negative number that cancels out the positive number and it disappears from the report. Therefore, any time a business owner sees the negative number they should realize that that indicates a payment. If the negative number precedes the invoice, that typically means that a business has either prepaid an invoice like a deposit, or overpaid. While this is not necessarily an error, it is less common, so business owners can easily verify if that negative number is accurate or not, and either fix the mistake or be confident that it is accurate.
Business owners should also be aware of what it means when they see a customer that has a negative amount and a positive amount in the same total. Part-time CFO services says that this typically means that the customer has paid an invoice, and the business owner has entered that payment into their accounting software, but it has not been applied to the invoice. They can simply go into their accounting software and ensure that the payment is applied to the correct invoice.
Verifying the accuracy of the information, and fixing errors can help business owners have accurate Accounts Receivable aging summaries, which can help them be confident that the clients that the statements of the money, and they can send out that information and call their clients to pay their bills. Doing this can help ensure that a business owner gets paid for the work that they do, and avoids running out of cash, which is the second most common reason why entrepreneurs in Canada fail.
