Payables, Receivables & Bad Debts for Business Owners
Plan payments, follow up invoices, and understand collection risk.
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Start with the question in front of you.
Owners responsible for supplier bills, customer invoices, and cash planning.
This NP guide combines plain-language explanations, fictional business examples, and practice activities. Read the example, try the exercise, then compare your reasoning with the explanation provided.
What you will learn
- Connect approval, billing, payment, and collection workflows.
- Use aging reports and a weekly money worksheet.
- Understand allowances, write-offs, and recoveries.
A useful idea before you download
Your supplier queue and customer queue both affect cash. A clear process tracks what is owed, when it is due, who is responsible, and what needs follow-up. Collecting an invoice and paying a bill should clear the related balance without recording the income or cost again.
Follow the numbers
A $2,000 sale on credit raises accounts receivable by $2,000. When the customer later pays $750, the remaining receivable is $1,250. The collection is not a second sale.
Try this in your business
Review overdue customer balances and bills due in the next two weeks. Identify disputed items before planning payments or collection calls.
Keep a note of the evidence you used and the question you still need to resolve. Bring that question to your next bookkeeping review.
How to use the guide
- Read the explanation and worked example.
- Complete the practice before checking the answer.
- Choose one action for your next financial review.
A common question
Does writing off a receivable always create a new expense?
Not under an allowance approach when the loss was already provided for. The write-off generally reduces both the receivable and the allowance. The guide explains the entries and their purpose.
Need help with your own books?
Use the guides to understand the work, then get support with QuickBooks Online setup, cleanup, or monthly bookkeeping.
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Browse all 11 accounting and bookkeeping guides or use the NP business calculators to explore a related decision.
Get the Free GuidesEducational material with illustrative examples. Apply the appropriate rules and facts to your business. © 2026 Net Profits Consulting LLC. We Count More Than Numbers.
