To process accounts receivable, consider collection terms, contact customers, and prepare the appropriate journal entries, notes the Houston Chronicle. The accounts receivable process begins at invoice generation and ends at payment collection.
An invoice should have an area that outlines the specific payment terms, reports the Houston Chronicle. Typically, this payment term is either within 15 or 30 days. In some instances, an upfront payment is necessary at the time of the order. Moreover, it is important to mark the exact due date of the payment on the invoice and to list any late payment penalties or fees.
If there is an unpaid balance after the invoice due date, send a reminder letter or email to a client, notes the Houston Chronicle. This letter should include the invoice number, the original due date, the remaining balance due, a relevant phone number and any additional penalties. If appropriate, include any further details regarding an installment or credit plan.
Ensure that, as a client makes payments, the total payments eventually match the invoice amount. Prepare a journal entry to credit the accounts receivable balance with all payments made by the client, with considerations of any discounts. At the end of the entry, the debit and credit totals should match.