When preparing the monthly financial statements, other than the regular monthly Profit & Loss and Balance Sheet statements, one other report that is vital to the business owner is the Accounts Receivables report. This report tells you about the status of the outstanding debts that your customers have not paid for the goods and services that you have already rendered to them.
It is important to monitor the amount and the period of each outstanding customers’ accounts. This is because some customers may not be paying you in time or in sufficient amounts that can justify you to continue supplying goods or rendering services to them. If you are not careful, before long, your business resources may run low and yourself may also potentially face the very dangerous situation of having difficulty paying off the creditors.
Therefore, you need to make sure that your customers are paying you on time or if not, in sufficient amounts so you can avoid the debt from becoming bad. So it is good practice for you to generate and review regularly your business’ Accounts Receivable report.