Accounts receivable

In a service business, a receivable appears with every invoice that has a payment term. It grows when:

• The invoice goes out late. The work is delivered, but the invoice waits for month end. Every day between delivery and invoice is added to the wait for the money.
• The payment term is long. Invoice at month end with 30 days to pay, and September’s work is paid at the end of October, if the client pays on time.
• A retainer fee is paid late. If one monthly invoice slips, the next month’s invoice lands on top of it.
• One line is disputed. The client disagrees with one line and holds the whole invoice.

Accounts receivable is the sum of the open balances on every invoice that has been sent and not yet paid in full. If a client paid part of an invoice, only the remainder counts.

For example, you sent a client an invoice for $8,660 and they paid $5,000 on time. That client’s receivable is $3,660, and that is the amount to follow up.

Ageing: grouping by days overdue

One total does not show how serious the position is, so receivables are grouped by how far past the due date they are. These groups are common practice and describe what to do; they are not a description of a PLYNTUM feature.

All three letters are in the payment reminder letter templates.

Average days to pay

One more figure per client helps: how many days they take to pay on average. Count the days from issue to payment on the last few invoices and average them. If a client with 14-day terms pays in 40 days on average, put 40 days in your cash flow plan, not 14. The 13-week cash flow forecast template is built for that plan.

Receivables shrink when invoices go out on time, payment terms are agreed in advance and open invoices are reviewed on a fixed rhythm.

• Invoice on the day of delivery, without waiting for month end.
• Agree terms before the work starts. Put the advance, milestones and payment term in the contract.
• Send the invoice to whoever pays it. Find out whether they need a contract or purchase order number on it.
• Remind the day after the due date. A short note is easy to write and easy to answer.
• Review open invoices once a week, client by client, not at month end.
• Reconcile balances with the client. A reconciliation statement shows whether both sides’ records agree and who owes whom how much.

In PLYNTUM, accounts receivable is called receivables, and it is on every plan. You write each invoice on the client it belongs to, in GEL, USD or EUR, or, from Core, draft it from approved time. When the money reaches your bank, you record the payment by hand against the same invoice, partial payments included.

Receivables show which invoices are unpaid and for how long. The payments view shows, per client, what has been collected and what is outstanding, with each invoice’s status, due date and paid date. Reports also show receivables by age.

From Core, the 13-week cash flow overview shows expected receipts and planned payments together, so you can see in which week an unpaid invoice leaves you short of cash. Only people whose role allows it see financial records.

PLYNTUM does not collect payments online: there is no card payment or payment link for clients. It does not send reminders automatically either; you write and send them yourself.

PLYNTUM is not accounting software. Your accountant keeps the statutory ledger and reporting in their own system; PLYNTUM shows the operational picture: which client has which invoice unpaid, and for how long. Invoices and payments go to the accountant as a CSV export; there is no integration with RS.ge or accounting software today.

See also finance and expenses in PLYNTUM, invoice software, unbilled work and all terms in the glossary.

• See what the work actually means for the business.
• The result comes with its explanation.
• Invoice software for service businesses: invoices that agree with the work
• Unbilled work