Incoming payments have to be checked, customers have to be reminded of payments and sometimes there is even the part that every company wants to avoid: the dunning process. This can become a real challenge for many companies. You quickly get lost in your own chaos and no one in your company still knows when and if an invoice was even paid. In the end, the liquidity of your own company suffers. However, you should not let it get that far!
With SeaTable you finally have all invoices or receivables due from your customers at a glance and know exactly about each individual status. SeaTable enables your accounts receivable department to manage receivables optimally and efficiently. In addition, information can be easily exchanged between the individual departments in your company. So that everyone can work with the same and correct information and you as an entrepreneur can sleep more peacefully again.
What is accounts receivable accounting?
Accounts receivable accounting is part of financial accounting. In accounts receivable accounting, all business transactions concerning the company's own customers are recorded. In principle, all receivables from customers are recorded and managed here. These normally result from the sale of goods and services from the company itself. Debtors are therefore always debtors who have to settle accounts receivable from deliveries and services. To put it bluntly, debtors show how much money your customers still owe you and make sure that these debts are paid. In the end, the individual debtor should be able to record a positive incoming payment.
What does accounts receivable accounting actually do?
Accounts receivable accounting has four important fields of activity. In these, they deal extensively with the booking of receivables and credit notes from deliveries and services, with the monitoring of individual incoming payments, with dunning and collection and with the actual creditworthiness of each customer in your company. This is also often referred to as debtor scoring. Accounts receivable accounting ensures that everything from the actual invoicing to the receipt of payment is tracked or documented and triggers the dunning process or debt collection in the event of non-payment.
If a customer buys a product from your company, they will receive an invoice. This is sent to the customer by the accounts receivable department. The customer now has the option of paying the invoice amount to your company within a certain predefined payment period, for example by direct debit or bank transfer. The invoice to the customer is also often referred to as a receivable (receivables management). The open receivables are checked daily. This also serves as preparatory work for the dunning process.
In the dunning process, a distinction is made between extrajudicial and judicial dunning. In the out-of-court dunning procedure, you first try to collect the invoice amount still owed to you by the debtor (customer) yourself. This is usually done with so-called dunning levels. With each dunning level, the customer is reminded again to settle the outstanding payment. Each company decides for itself how many dunning levels there are up to the judicial dunning process.
In the best case, the customer receives a friendly payment reminder before the extraordinary dunning process starts. The aim here is in particular not to weaken the existing business relationship and to settle the conflict on as "personal a level" as possible.
In the case of the judicial dunning process, the extraordinary dunning process has therefore unfortunately not worked and the outstanding payment has still not been settled by the debtor (customer). In this case, a judicial reminder is considered. This is done by lawyers or debt collection agencies, but can also be done by your own accounts receivable department if you have the necessary knowledge. It is important to be familiar with the processes of the courts and bailiffs.
However, the so-called debtor scoring is also particularly important in the company. This should provide important information about your customers' actual willingness to pay. Explicit statements can be made about the payment history of each individual customer, e.g. about payment reliability or individual defaults. In this way, customer insolvencies can be recognised at an early stage and the actual financial damage can be reduced to a minimum. In this case, the customer is simply blocked and no longer supplied with products or services until further notice.
In addition to all the points already mentioned, it is also particularly important to pass on information about outstanding payments. From this information, decisions can be made in no time at all about possible upcoming investments and your own liquidity. If more and more payments are missed, your company may not be able to initiate new investments. If, on the other hand, the majority of your receivables have been paid, your company is liquid and nothing stands in the way of further investments. The liquidity of a company therefore always depends on the outstanding or settled receivables.
What is the debtor risk and how can it be counteracted?
Not all customers always pay on time or some customers deliberately do not pay their invoices. However, your accounts receivable department must be able to deal with this so-called debtor risk in the best possible way and to assess the payment options, which differ in late payment, inability to pay and unwillingness to pay, as accurately as possible.
In the case of late payment, the customer (debtor) does not pay his invoice by the payment deadline already agreed. In the case of insolvency, we are already talking about insolvency. In this case, the customer can no longer meet his payment obligations. In the case of unwillingness to pay, on the other hand, the customer refuses to pay and acts intentionally. This can only be counteracted by proper scoring.
Scoring is a detailed examination of the customer. Past payments are listed in detail in the actual debtor account of each individual customer and are included in the credit rating. If there are problems with payments that have to be settled in the past, the customer's score will be lowered. This can also lead to the actual blocking or non-delivery of the debtor. This can be remedied by advance payment, for example. If, on the other hand, the customer has always paid all his invoices on time, he should have the best possible scoring in your accounts receivable accounting.
How to efficiently manage your accounts receivable in SeaTable
In our last article, "CRM: From Customer Entry to Quotation", we showed you how you can create your very own CRM system in SeaTable in no time at all. In this article or template, we now follow on from the article just mentioned and show you how you can efficiently map your accounts receivable in SeaTable. So far, everything has revolved around the customer base, the product portfolio and the creation of quotations. Now we move from the quotation to the invoicing. Thus, in addition to the "Customer data", "Sales team", "Offers" and "Product Catalogue" spreadsheets, you will also find the new "Invoices" spreadsheet in the actual template.
From the offer to the invoice order
The spreadsheet "Offers" has now been extended by the three new columns "Accounting Department", "Payment Status" and "Invoices". If your customer has accepted your offer and wants to purchase the goods or services, you now have the option of informing the accounting department to invoice the customer with just one click on the "Please create Invoice" button. All the important data for the accepted offer moves directly as a new line into the "Invoices" spreadsheet. For this purpose, a script is executed in the background that writes the data directly into the table "Invoices" and ensures a link with the table sheets "Invoices", "Offers" and "Customer data".
You can then conveniently view the actual payment status in the "Payment Status" column. All invoices are also linked to the "Invoices" spreadsheet and can of course also be viewed in the "Invoices" column. In this way, you as an entrepreneur and your sales team always have all the important information at a glance and, if necessary, can also follow up personally with the customer if a payment should not be made on time.
Invoice creation in just a few seconds
As already mentioned, all important information on the accepted offer by the customer is transferred directly to the "Invoices" spreadsheet. Thus, all data such as offer number, customer name, customer number, contact person, street and house number, postcode, city, country and all product information with product name, unit price, quantity and total amount are automatically transferred. All your accounting department has to do now is press the "Create Invoice" button in the "Invoice" column.
The "Page Design" plug-in opens automatically and fills in all the important information. You can then easily save the invoice as a PDF file and store it in the "Files" column or print it out and send it to your customer by e-mail or letter. Of course, you can adapt or add to the predefined page design template according to your wishes in just a few minutes.
Keeping an eye on the payment status
To ensure that all relevant persons in your company besides the actual accounts receivable department know whether a customer pays his invoices or not, the column "Payment Status" is available. If an offer is accepted by the customer and an invoice is generated, the payment status is automatically changed to "Pending". As soon as an incoming payment takes place, your accounts receivable department can change the Single Select column "Payment Status" to "Paid" and enter the date of the incoming payment under "Date of Payment". With the grouping function and the different views by "Payment Status" you get the best possible view of all current payment statuses. Furthermore, you will now also find the "Invoice Status" in the Kanban plug-in, so that you really cannot lose sight of any payment status.
The additional great thing about the payment status: Each status also affects your actual customer master under the worksheet "Customer data". This means: If a customer pays all his invoices or is "Pending", the actual row is marked green. If the customer has not paid his invoice for any reason, the line colour changes to red and every employee knows that this customer is currently in the dunning process and should not be supplied with products or services until further notice.
Communicate the payment status to your customers with just one click
So that your accounts receivable department can also inform your customers about the receipt of payment or a delay in payment, the two buttons "Receipt of Payment" and "Dunning Info" are available in SeaTable. With just one click on the respective button, an email is automatically sent to the contact email address under the column "Email address". In this e-mail, information such as the invoice number or the amount is automatically added. Of course, you can easily customise the message to your customers about the respective payment statuses as you wish.
Always all figures in view
To ensure that you always have the most important figures in view, the template has been supplemented with three additional relevant statistics. Under "Turnover of all product" you will now find the total turnover that you have generated through services or goods in your company. Under "Invoice status in percentage" you can see exactly how many invoices have been recorded in total and how these are divided up in percent according to the three different payment statuses "Paid", "Pending" and "Dunning". So that you always know exactly what this means in terms of turnover, the statistic "Payment Status (Turnover)" has also been integrated. This accurately reflects the turnover of the different payment statuses of your customers.
With SeaTable you and your accounts receivable department can sleep soundly
So it doesn't always have to end up with expensive accounting software such as Lexware, Lexoffice, sevDesk, orgaMax or Billie, for example, which may even plunge your company into enormous overheads. You can definitely save yourself the money.
Thanks to its enormous flexibility, SeaTable can also make your accounts receivable department work perfectly. The clear advantage that SeaTable brings with it is the diversity in which the product itself can be used. In addition to accounts receivable, other important use cases in your company can also be covered. You can find more about this in our blog or directly in our templates. Convince yourself of the most powerful and innovative spreadsheet and get started with your accounts receivable accounting today.