In a volatile business environment, cash flow management is a key factor in helping businesses maintain stable operations and sustainable development. In particular, accounts receivable reports are an important tool to help businesses effectively control the amounts that have not yet been collected from customers.
In this article, let's join Bizzi to learn more about accounts receivable reports as well as how to create an accurate customer accounts receivable report template.
What is an accounts receivable report?
The accounts receivable report includes information on amounts owed, payments received, and key metrics such as days sales outstanding (DSO) to help businesses manage cash flow and evaluate financial performance.
Definition of accounts receivable and accounts payable
Debt is an accounting term that refers to an individual or business purchasing goods or services or incurring a payment period with another party but cannot pay at that time and must be transferred to the next payment period. Liabilities are divided into two main types: receivables and payables.
Accounts receivable are amounts of money that a business is waiting for customers to pay after selling goods or providing services but has not yet collected the money or has not yet collected the full amount according to the signed contract.
Debt report is an important accounting document used to record and summarize a business's receivables and payables over a certain period of time.
Purpose of using accounts receivable report:
- Help businesses closely control receivables and develop plans to collect and pay receivables.
- Effective financial management, minimizing risks and cash flow management.
- Ensure financial transparency, help businesses compare data with customers and internal accountants, and limit errors.
- Support managers to make quick and timely business decisions, optimize sales strategies and credit decisions.
The Importance of Comprehensive Accounts Receivable Reporting
Accounts receivable report is an important tool to help businesses closely control debts, ensuring business operations run smoothly and effectively.
Limit risk and financial loss
- If not managed effectively, businesses can easily encounter bad debt and overdue debt, leading to a situation where capital cannot be rotated, additional financial costs are incurred, and profits are turned into expenses.
- Cash flow imbalance due to working capital shortage if accounts receivable are not monitored, affecting operational capacity and reputation with suppliers.
- Increased risk of bad debt if not closely monitored, customers may delay or not pay, causing great financial loss.
Improve management and decision making efficiency
- Provides a high-level overview of receivables, saving time and increasing accuracy in management decision making.
- It is the basis for businesses to adjust policies on payment, debt terms, promotions, and discounts for customers.
- Businesses can predict receivables arising during the period and make timely decisions.
Instructions on how to create the most detailed customer receivables report form
Here are the important steps in preparing an accounts receivable report:
Prepare information and data
- Collect all documents, invoices, receipts related to debtOriginal documents proving the amount of debt not yet paid include: economic contracts, loan agreements, debt commitments; contract liquidation (if any); debt reconciliation or request for debt reconciliation/collection; debt statement and other related documents.
- Clearly define the reporting period (monthly, quarterly, yearly) and check the accuracy of accounting data.
Main contents of accounts receivable report
- The report should clearly show the period of time over which the debt is accumulated.
- The account used for posting is 131 for the accounts receivable summary report.
- Customer code and name to accurately track each debt.
- Key financial ratios include:
- Beginning balance Debt: the amount that the unit owes the company from the beginning of the period, taken from the debt detail book.
- Beginning Credit Balance: If the business still owes money to customers, this amount will be recorded in the Beginning Credit Balance column.
- Incurred during the period: the amount of debt incurred during the reporting period (including both debit and credit).
- Ending balance: the amount the entity owes the company at the end of the reporting period.
- Total: aggregate data from the above items to assess the debt situation of each customer.
- Notes: notes or other information relating to the debtor unit.
Classify and reconcile receivables
- Classification of debts by subject: Customer receivables.
- Classification of debt by debt age / overdue time: Debt under 30 days, debt from 30-60 days, debt over 90 days.
- Classify debts by contract or invoice.
- Check and reconcile detailed accounts receivable books periodically to ensure accurate figures (internally and with customers/suppliers).
Popular customer receivables report template
Below is a summary of the 3 most commonly used customer receivables report templates. Businesses can choose the appropriate template in each case:
Sample report of consolidated customer receivables
- Summarize all debts that customers have not paid to the business, helping to monitor debt collection status and assess payment ability.
- Usually includes customer list, outstanding balance, payment due date, amount receivable according to invoice/contract.
- Statistics can be compiled by salesperson, project, sales contract, or business unit.
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Accounts Payable Report Template
- Helps businesses track short-term/long-term debt, thereby planning appropriate finances.
- Classify debt according to specific terms: debt under 30 days (within payment term), debt from 30-60 days (at risk of overdue), debt over 90 days (at risk of bad debt).
- Closely monitor upcoming debt payments to avoid penalties.
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Applying modern technology in managing accounts receivable reports
With the traditional form of debt management using Excel, businesses will face many challenges such as:
- It is easy to miss customer receivables, difficult to track to remind, urge or collect debts.
- Management accountants have to spend time entering detailed data for each transaction and manually synthesizing data, instead of focusing on analyzing and supporting management solutions.
- Inaccurate debt data affects financial decisions and makes it difficult to scale your business.
With the development of modern technology, businesses can fully take advantage of many outstanding benefits from the smart debt management reporting system, typically:
- Control customer receivables quickly and promptly, saving time on updating and reconciling.
- Timely warning when customers are overdue or about to expire. The system automatically sends reminders when debts are about to expire and changes the color of overdue tasks.
- Consolidate the progress of all receivables on a single page with real-time updates.
- Accurate, time-saving automated reporting and automatically generates visual chart reports that show receivables trendlines.
Some outstanding technology solutions
- B-Canvas: A tool specifically designed for Vietnamese businesses, especially effective in managing receivables for small and medium-sized enterprises. B-Canvas automates the receivables management process, aggregates information, promptly warns of overdue or approaching due debts, and displays visual data on a single interface.
- MISA SME.NET: Accounting software allows users to easily create and view detailed reports on receivables by item, and summarize customer receivables according to many criteria.
- Finance AI Agent (Lac Viet): Support businesses to fully automate the debt tracking process, synchronize data in real time, warn of overdue debts, analyze customer payment trends, rank payment risks and propose optimized debt collection plans.
- Bizzi – Giải pháp Quản lý Công nợ tự động
Bizzi provides a multi-featured integrated platform that helps businesses manage their debts effectively. Reduce 80% debt processing time and increase the rate of on-time debt collection. Bizzi's outstanding debt management features include:
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- Automatic debt reminder: Create debt reminder process according to script via email, text message.
- Debt control: Monitor, reconcile debt and important indicators such as DSO (Days Sales Outstanding), debt aging report.
- Automatic customer debt tracking: Automatically record and track each customer's debt.
- Debt due warning: Provides warnings when debts are nearing payment due date or show signs of overdue.
- Reconciliation of debts: Compare and confirm account balances with customers.
- Debt report: Create detailed reports on the company's debt situation.
Conclude
In short, the accounts receivable report is an important document that helps managers know exactly who owes, how much they owe, whether it is overdue or not, thereby proactively planning to collect money and spend it reasonably. Businesses can consider combining with automatic debt reminder tools or periodically reconciling debts to help the collection process take place quickly and transparently.
At the same time, it can be affirmed that modern technology is the solution to the problem of manual, ineffective debt management. Integrating automatic and intelligent solutions, managers can control cash flow comprehensively, proactively and accurately!
If your business is looking for a specialized solution to solve the problems you are facing, contact Bizzi immediately for advice and product trial:
- Link to register for a trial of Bizzi products: https://bizzi.vn/dang-ky-dung-thu/
- Schedule a demo: https://bizzi.vn/dat-lich-demo