Updated: Sep 29
Get a better handle on the AR side of your cash flow by incorporating these 4 QuickBooks Desktop tools.
Encouraging customers to pay faster is at the top of many business owners' lists of priorities. But did you know that QuickBooks Desktop offers a few ways to help you understand and improve your cash flow? One way to get a quick look at how you’re doing is to look at your Payments Snapshot. Click Snapshots in the toolbar, then click the Payments tab. Look at the Invoice Payment Status chart and the List of Customers Who Owe Money. Run the A/R Aging report. How are you doing right now? Is there room for improvement? If receiving payments more quickly is your business goal in 2023, keep reading to learn how you can take better advantage of your accounting software.
Ensure your customers can pay online
One of the best ways to improve cashflow in your business is by using Intuit Merchant Accounts. This service offers payment and transaction management for businesses that use QuickBooks and other Intuit products. It allows businesses to accept payments online via credit card or ACH, and can be game-changing when it comes to decreasing the amount of time it takes a customer to pay your invoice. Account Ability Consulting offers preferred pricing on Intuit Merchant Account rates, so reach out to us before signing up for this service on your own!
Send statements to past-due customers.
If you've already sent a customer multiple reminders about past-due invoices, following up with a statement can be a great approach; they may even appreciate having a consolidated list of their outstanding payments.
You can indicate which group of customers should be sent statements in QuickBooks.
To create a statement, open the Customers menu and select Create Statements. Verify the Statement Date and choose between your two options. You can either create statements that include all transactions (invoices and payments) for a given period, or you can just create statements for customers who have open transactions that are more than X days past due. In the next box, select the customers who should receive statements. A panel to the right (not pictured) contains more options. When you’re done, you can Preview, Print, and/or E-mail the statements.
Do you have a customer with a habit of forgetting to pay but who responds well to reminders? Consider incorporating a regular quarterly (or monthly) statement into your workflow for them. You can even automate statement distribution--let us know if we can help you set this up. Remember: it doesn't benefit your or your customer's cash flow to have outstanding payments for months at a time.
Customize your invoices and send them out promptly.
If you haven’t explored QuickBooks’ options for invoice customization, now is a great time to take advantage of this feature. Open the Lists menu and select Templates. Double-click on a form whose Type is Invoice. Click Manage Templates and click on one to highlight it. You’ll see the template in the right pane. Click Copy and give it a new name (so you don’t overwrite the original) in the Template Name field. Click OK to open the Basic Customization window, where you can customize the template.
As you make changes, they’ll be reflected in the template image. Click Additional Customization for more fine-tuning. Click OK when you’re done to add your new template to the available list. We have a detailed step-by-step tutorial here. But if you need more help with this process, just reach out to us.
When payments go past due, assess finance charges.
Assessing finance charges may be a practice you hate doing, but for some customers, it may be the only way to get their attention. QuickBooks allows the account Admin to create finance charge invoices. Start by allowing seriously overdue customers to rectify the situation within a set period of time and let them know that if that deadline is missed, finance charges may be assessed. If the open balance is still unresolved, you can assess finance charges by opening the Edit menu and selecting Preferences. Click Finance Charges and then the Company Preferences tab to open the window pictured below. Complete the fields and click OK.
NOTE: Some jurisdictions prohibit the charging of finance fees on overdue payments. Talk to your accountant and ensure you understand local laws before you apply any finance charges.
You have a few options when assessing finance charges. To see who should be invoiced for finance charges, open the Customers menu and select Assess Finance Charges. Change the Assessment Date if necessary, and a list of delinquent customers opens in a table, along with their Overdue Balance and Finance Charge. Next, check the first column of each customer you plan to charge, then click Assess Charges. QuickBooks will create a separate invoice for finance charges. If you leave the customer’s row unchecked in the table so no invoice is generated, you can include the charges on the following statement.
We know this process is complicated. If you're interested in assessing finance charges and need assistance in implementation, reach out to us.
We hope these tips help you improve your cash flow in 2023! As always, we stand ready to help with any process implementation and training needs you may have.