Accounts Receivable (AR) manages all incoming payments from customers, invoice tracking, and aging reports to help you maintain healthy cash flow.
Overview
The AR system provides:
- Payment entry with automatic invoice allocation
- Multi-invoice payment distribution
- Payment history and audit trail
- Aging reports (30/60/90 days)
- Outstanding invoice tracking
- Customer payment patterns
Entering a Payment
1 Access Payment Entry
Navigate to Accounting → Accounts Receivable → Payment Entry
2 Select Customer
Click the customer lookup field and select the customer making the payment.
The system will automatically load all outstanding invoices for this customer.
3 Enter Payment Details
- Payment Date: Date payment was received
- Payment Method: Check, Cash, Wire Transfer, Credit Card, etc.
- Reference Number: Check number or transaction ID
- Total Amount: Total payment amount received
- Notes: Optional payment notes or comments
4 Allocate to Invoices
The system displays all outstanding invoices with:
- Invoice number and date
- Original amount
- Amount paid to date
- Outstanding balance
- Days outstanding
Allocation Options:
- Auto-Allocate (Oldest First): Automatically applies payment to oldest invoices first
- Manual Allocation: Enter specific amounts for each invoice
- Full Payment: Click invoice to apply full outstanding balance
💡 Payment Allocation Logic
When using auto-allocation:
- Payment is applied to oldest invoice first
- If payment exceeds invoice balance, remainder moves to next oldest
- Continues until payment is fully allocated or all invoices are paid
- Any excess amount is stored as customer credit for future use
5 Review and Save
Review the allocation summary showing:
- Total payment amount
- Total allocated amount
- Remaining unapplied amount (if any)
Click "Save Payment" to record the transaction.
Viewing Aging Report
1 Access Aging Report
Navigate to Accounting → Accounts Receivable → Aging Report
2 Report Parameters
- As of Date: Date to calculate aging (default: today)
- Customer Filter: All customers or specific customer
- Minimum Balance: Hide customers below threshold
- Show Zero Balances: Include/exclude customers with $0 balance
3 Aging Buckets
Report displays outstanding amounts in 5 buckets:
| Bucket | Days Outstanding | Description |
|---|---|---|
| Current | 0-30 days | Recently issued invoices |
| 31-60 | 31-60 days | Past due 1 month |
| 61-90 | 61-90 days | Past due 2 months |
| 91-120 | 91-120 days | Past due 3 months |
| 120+ | Over 120 days | Seriously delinquent |
4 Export and Print
Options available:
- Print Report: Generate PDF for printing
- Export to CSV: Download for Excel analysis
- Email to Customer: Send statement directly
Payment History
View complete payment history for any customer:
- Access: Customer detail → Payment History tab
- Displays: Date, amount, method, reference, invoices paid
- Filter by: Date range, payment method, amount range
- Actions: View receipt, reverse payment (if allowed), print history
⚠️ Reversing Payments
Important notes about payment reversals:
- Requires "Reverse AR Payment" permission
- Creates reversing GL entries automatically
- Un-allocates payment from all invoices
- Original payment record is marked "REVERSED" (not deleted)
- Audit trail maintains complete history
- Cannot reverse payments in closed accounting periods
Customer Statements
Generate detailed customer statements showing:
- Opening balance
- All invoices issued during period
- All payments received
- Closing balance
- Aging summary
Statement Types:
- Current Statement: All outstanding invoices only
- Period Statement: All activity within date range
- Open Item Statement: Unpaid invoices only
General Ledger Integration
💡 Card and Stripe payments do not go straight to your bank. They post to a clearing account until the processor pays out, which you then reconcile under End of Day. See Deposits & Clearing Accounts.
All AR transactions automatically create GL entries:
Payment Entry
- Debit: Cash/Bank Account (payment method account)
- Credit: Accounts Receivable
Payment Reversal
- Debit: Accounts Receivable
- Credit: Cash/Bank Account
💡 Best Practices
- Enter payments daily to maintain accurate cash position
- Always verify payment amount before allocating to invoices
- Use reference numbers for all payments for easy tracking
- Review aging report weekly to identify collection issues
- Send statements monthly to all customers with balances
- Document any payment discrepancies in notes field
- Reconcile AR sub-ledger to GL monthly
Common Scenarios
Partial Payment
Customer pays less than invoice total:
- Enter actual payment amount received
- Allocate to invoice (partial amount)
- Invoice remains open with reduced balance
- Shows in aging report until fully paid
Deposit or payment on account
Money received before anyone knows which invoices it covers — a deposit, or a cheque that arrives without a remittance advice:
- Enter the payment amount and leave the allocations empty
- Confirm when asked — the full amount is held as a credit on the customer's account
- Later, enter a payment of 0.00 and allocate that credit against the invoices it turns out to cover
💡 An unallocated credit shows in the receivables list as a PAYMENT row with a negative outstanding balance, and appears in the allocation list alongside invoices when you next enter a payment for that customer.
Overpayment
Customer pays more than total owed:
- Enter full payment amount
- Allocate to all outstanding invoices
- Excess automatically becomes customer credit
- Credit appears on next statement
- Applied to future invoices automatically
Multiple Invoices
Single payment covering multiple invoices:
- Enter total payment amount
- Use auto-allocate for oldest-first application
- OR manually enter amounts for each invoice
- System tracks allocation per invoice