How can you effectively manage accounts payable and receivable using back office software?

2 Set up your software

Once you have chosen your back office software, you need to set it up properly to manage your accounts payable and receivable. This involves entering essential business information, such as your name, address, tax ID, and bank account details. Additionally, you should create a chart of accounts, which is a list of all the accounts you use to record your transactions. This chart should include assets like cash, receivables, and inventory; liabilities like payables, loans, and taxes; equity like capital, retained earnings, and dividends; income such as sales, interest, and fees; and expenses such as cost of goods sold, wages, and rent.

3 Manage your accounts payable

Your accounts payable are the amounts you owe to your suppliers, vendors, and creditors. To manage them with back office software, you need to enter your bills (invoices) either manually or with OCR technology, schedule payments either manually or with EFT or credit card, track due dates to avoid late fees and penalties, and reconcile your accounts to verify that your records match your bank statements. Reconciliation tools can be used to identify and resolve any discrepancies.

4 Manage your accounts receivable

Managing your accounts receivable with back office software requires the creation of professional and consistent invoices, which can then be delivered to customers via email, SMS, or online portals. Payments can be accepted through payment gateways such as PayPal, Stripe, or Square. To avoid bad debts, reminders, notifications, and statements should be used to prompt customers to pay overdue invoices. Batch deposits can also be used to group multiple payments into one deposit, thus saving time and fees.