Aging Reports and Collections in QuickBooks

Aging reports and collections in QuickBooks are essential tools for managing your accounts receivable and ensuring that you collect outstanding payments from your customers. Aging reports help you track overdue invoices, while collections strategies involve efforts to recover those unpaid amounts. Here’s how to use aging reports and collections in QuickBooks:

Aging Reports in QuickBooks:

1. Access Aging Reports:
   • In both QuickBooks Online and QuickBooks Desktop, you can access aging reports under the “Reports” menu.
2. Select the Appropriate Aging Report:
   • There are typically two types of aging reports: “A/R Aging Summary” and “A/R Aging Detail.”
   • The “A/R Aging Summary” report provides a summary of outstanding balances grouped by aging periods (e.g., current, 1-30 days, 31-60 days, 61-90 days, over 90 days).
   • The “A/R Aging Detail” report provides a detailed list of individual invoices, including their aging.
3. Review the Report:
   • Examine the aging report to see which customers have outstanding invoices and how long those invoices have been unpaid.
4. Follow Up on Overdue Invoices:
   • Use the aging report to prioritize follow-up actions. Focus on customers with the oldest overdue invoices first.
5. Collections Actions:
   • Here are some steps to consider when collecting overdue payments:
     • Send Reminders: Use QuickBooks to send payment reminders to customers with overdue invoices.
     • Contact Customers: Reach out to customers with overdue payments by phone or email to remind them of their outstanding balance and request payment.
     • Offer Payment Plans: In some cases, you may need to negotiate payment plans with customers to help them settle their debts.
     • Assess Late Fees: Depending on your business’s policies, you may apply late fees to overdue invoices to encourage prompt payment.
     • Escalate Collection Efforts: If necessary, you may need to escalate collection efforts by involving a collections agency or pursuing legal action.
6. Document Collection Activities:
   • Keep detailed records of your collection efforts in QuickBooks, including notes on phone calls, emails, and other interactions with customers.

Using Collections Tools in QuickBooks Online:

QuickBooks Online offers additional collections tools through its “Collections Center.” To access it:

1. Log In to QuickBooks Online:
   • Open your web browser and log in to your QuickBooks Online account.
2. Access Collections Center:
   • Go to the “Sales” menu and select “Collections Center.”
3. Review Collections Center:
   • The Collections Center provides a dashboard where you can track overdue invoices, send payment reminders, and take collections actions.
4. Send Payment Reminders:
   • Use the “Send Reminder” option in the Collections Center to send automated payment reminders to customers with overdue invoices.
5. Customize Collections Actions:
   • You can customize the collections actions in the Collections Center, such as setting up payment plans or applying late fees.

QuickBooks is a powerful tool that simplifies financial management for small businesses, often used hand in hand with a dedicated bookkeeper for small business owners.

By using aging reports and collections tools in QuickBooks, you can effectively manage your accounts receivable, reduce the risk of unpaid invoices, and improve your cash flow. It’s important to have clear collections policies and procedures in place to ensure that you can efficiently recover overdue payments while maintaining positive customer relationships.