Accounts Receivable and Accounts Payable

Accounts receivable represent the money your customers still owe you for sales that have already been invoiced. Accounts payable are the opposite: the money you owe your suppliers. Together, they put a significant strain on your cash flow (the money actually available in the company's account).

Brief

Customer accounts: money owed to you, therefore an asset owned by the company.
Accounts payable: money you owe, therefore a debt (a liability)
The age report shows which bills are outstanding, and for how long.
Monitoring them closely directly protects your cash flow (the money in the account).

Why does this matter?

A company can show a healthy profit on paper while being short of cash in the bank: it's almost always a matter of overdue accounts receivable. A concrete example: you invoice $10,000 for work delivered, but the client pays in 60 days, while you pay your employees and suppliers this week. For those 60 days, you're essentially financing your client interest-free, using your own money. Conversely, managing your accounts payable effectively (using the payment terms granted to you) gives you breathing room without damaging your relationships. A simple ritual helps: each week, pull up a list of what's owed, follow up promptly, and invoice as soon as the work is delivered. Bankeo will connect you with a certified accountant free of charge to set up this monitoring, and we'll be there to support you every step of the way.

Frequently asked questions

Customer accounts, supplier accounts: what exactly are they?

Accounts receivable are the invoices you've sent but haven't yet paid: money owed to you. Accounts payable are the invoices you've received but haven't yet paid: money you owe. These two lists, together, show how much money will soon be coming in and going out.

Why is my business profitable, but still tight on cash?

Profit is calculated when you invoice, but money only comes in when the customer pays. If your customers pay in 60 days while you pay your suppliers in 30 days, you're financing the difference with your own money. The solution: clear payment terms, prompt invoicing, and regular reminders.

How can I better manage my customer accounts?

Invoice as soon as the work is delivered, offer electronic payment, include your payment terms in the contract, and follow up promptly at the first sign of delay; a deposit at the outset also helps. A key tool: the aging report, a table that categorizes your unpaid invoices by age (current, 30, 60, 90 days and more) to see which ones to prioritize. Bankeo will connect you with a certified accountant free of charge to implement these practices and follow-up procedures, at no cost to you, and we'll be there to support you every step of the way.