Accounts Receivable

Halifax Bookkeeping: Accounts Receivable Made Easy

Starting a business is exciting, but it also comes with the challenge of setting up an efficient bookkeeping system. Even if you have bookkeeping experience, managing your business while keeping a meticulous record of financial transactions can become overwhelming. That’s where Halifax Bookkeeping comes in—we specialize in taking the weight of bookkeeping off your shoulders so you can focus on growing your business.

While bookkeeping and record-keeping are often used interchangeably, bookkeeping encompasses various categories, each critical to your business’s success. One of the most essential categories is accounts receivable (AR).

Why Are Accounts Receivable Important?

No matter the size or age of your business, accounts receivable are a key indicator of financial health. This ledger tracks the money owed to your company for goods or services provided—proof of your hard work and an essential measure of your business’s ability to generate revenue. While AR doesn’t represent profit directly, it highlights how effectively your business collects revenue.

Accurate accounts receivable records are vital, especially during tax preparation. They provide a clear picture of your business’s income and ensure compliance with financial regulations. To maintain this accuracy, it’s essential to have a professional bookkeeper manage your AR ledger.

The Challenges of Managing Accounts Receivable

When your business is just starting, it might be manageable to remember who owes your company money. However, as your business grows, tracking outstanding payments becomes increasingly complex without proper systems in place. While reviewing purchase orders may provide a snapshot of daily sales, understanding your company’s overall performance requires consistent tracking of accounts receivable—ideally on a weekly or monthly basis.