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Accounts Receivable (AR)
12 min
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Crash Courses · Basic

Accounts Receivable (AR)

Create invoices, track outstanding payments, follow up on overdue accounts, and keep cash flowing in.
12 min read+150 XP on completionCert: Accounting & Bookkeeping
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Accounts Receivable (AR)

The Full AR Cycle

1. Deliver Service / Product
2. Create and Send Invoice
   Dr. Accounts Receivable / Cr. Revenue
3. Monitor via AR Aging Report
4. Follow Up on Overdue Invoices
5. Receive Payment
   Dr. Cash / Cr. Accounts Receivable
6. Apply Payment to Invoice in QuickBooks
7. Deposit and Reconcile

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Creating an Invoice in QuickBooks

  1. + New > Invoice
  2. Select Customer
  3. Set Invoice Date and Due Date
  4. Add service line items with description and amount
  5. Set Terms (Net 30, Due on Receipt, etc.)
  6. Save and Send

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Follow-Up Escalation Ladder

Days OverdueAction
1--7 daysFriendly reminder email
8--15 daysPhone call + email
16--30 daysFirm written notice
31--60 daysEscalate to management
60+ daysConsider write-off or collections

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Applying a Payment in QuickBooks

  1. + New > Receive Payment
  2. Select the Customer
  3. Select the Invoice to apply the payment to
  4. Enter Payment Amount and Method
  5. Save

Always apply payments to specific invoices. Unapplied cash creates mismatches that break reconciliation.

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Credit Memos and Write-Offs

Credit Memo (overbilled, return, discount):

+ New > Credit Memo > Customer + amount > Apply to invoice

Bad Debt Write-Off (90+ days, uncollectable):

Credit Memo posted to Bad Debt Expense account > Apply to the overdue invoice

Never delete old invoices -- write them off properly to preserve the audit trail.

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