Home based business owners manage many tasks and accounting is one of them. Part of the cycle includes knowing how much money people owe you the products or services you provide. It also includes keeping a tally on the balances you owe to your vendors.
To stay on track here are some ways to help monitor your accounts receivable and accounts payable.
Accounts Receivable is the money that customers owe for goods or services that they receive on account. For example, customers who are billed for services may be allowed to pay within 10, 15, or 30 days. The best ways to monitor accounts receivable is to:
Alternately, many business owners realize that stretching out the time to make payment to vendors improvements cash flows. A company accrues accounts payable when it receives goods and services from vendors but allowed to pay at a point in the future. Some examples of when you may have accounts payable include telephone service, payroll liabilities, and inventory purchases. When monitoring accounts payable be sure to:
Having an accounts receivable and accounts payable system is a benefit to your company. Use the information to prepare weekly reports so that you can observe the inflows and outflows of cash. Learn more about reporting and forecasting at http://www.tbsusa.com