Hardwood Floors April/May 2026

By Dana Rogers

Simply put, accounts receivable represents money owed to your business for goods or services already delivered. Accounts receivable is essential because it supports liquidity and cash flow, reflects customer payment reliability and risk exposure, and impacts working capital that powers business expansion. Regardless of the system used to track accounts receivable, several best practices should be followed consistently and routinely to ensure your accounts receivable process operates effectively for your business. ESTABLISH CLEAR CREDIT AND PAYMENT POLICIES Before any goods are delivered or services are performed, you need to have a clear set of policies regarding how and to whom you offer credit. These rules should be clear, written, and easy to find by including them in contracts, estimates, and invoices. These policies should address payment terms, accepted payment methods, any required upfront deposits, late penalties or interest, and credit limits for repeat customers. INVOICE CUSTOMERS PROMPTLY

Unless your company operates using a cash-on delivery model, the primary source of income your business receives most likely will come from paid invoices. Any delays, inaccuracies, or other issues that affect the payment of these invoices can cause a potentially substantial impact to your bottom line. To keep your business income stream smooth and consistent, you need effective accounts receivable management.

1 2

Make sure to send out invoices to your customers as soon as possible after service or delivery. To avoid errors that could delay payment, use a standard invoice template that includes all the required details, including invoice number and date, due date,