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<< Click to Display Table of Contents >> Navigation: Quick Answers > Accounting Operations > A/R - Accounts Receivable |
The Accounts Receivable system in MLS 2026 tracks money owed to your business for services already performed.
A properly maintained A/R system:
•Improves cash flow
•Tracks outstanding balances
•Produces accurate statements
•Simplifies collections
•Maintains professional client relationships
Poor A/R management is one of the largest causes of cash flow problems in service businesses.
Accounts Receivable represents:
Money owed to your business by clients.
In accounting terms:
•A/R is an Asset
•Sales create Debit entries to A/R
•Payments reduce the balance
A/R accounts:
•Encourage repeat business
•Support fleet operations
•Simplify corporate billing
•Improve client convenience
Examples include:
•Fleet accounts
•Commercial clients
•Government agencies
•Warranty companies
•Long-term repeat customers
Only after management approval.
Granting credit means:
You are trusting the client to pay later.
Always include:
•Billing address
•Contact information
•Credit limit
•Billing cycle
•Payment terms
•Tax status
Billing cycles determine:
•When statements print
•Which accounts are grouped
•How aging is calculated
Examples:
•Due on receipt
•Net 15
•Net 30
•Net 45
MLS:
•Transfers the unpaid balance into the client account
•Creates a transaction record
•Updates aging totals
Because the client does not yet have an A/R account.
MLS protects the transaction by:
•Saving it in the Receivables Transaction File
Create the client A/R account first.
Then process the pending transaction.
Use:
Reports → Statements
MLS will:
•Select accounts by billing cycle
•Calculate balances
•Print statements automatically
Yes.
This is especially useful for:
•Collection questions
•Client requests
•Interim billing
Regular statements:
•Improve collections
•Reduce disputes
•Improve cash flow
•Demonstrate professionalism
Aging categorizes balances by age:
•Current
•30 days
•60 days
•90 days
•Older
Aging helps identify:
•Slow-paying accounts
•Collection problems
•Credit risks
•Cash flow concerns
Large balances in:
•60+
•90+
•Over 120 days
Usually indicate collection problems.
Yes.
Finance charges may be:
•Displayed
•Posted
•Included on statements
Depending on your settings.
Not necessarily.
Some shops:
•Display interest as a reminder
•Avoid formally posting the charges
Aggressive finance charges can:
•Hurt customer relationships
•Increase disputes
•Complicate collections
Payments may be entered through:
•Receipts
•Workorders
•A/R payment posting
Yes.
MLS will:
•Apply the payment
•Leave the remaining balance outstanding
Proper payment tracking improves:
•Bank reconciliation
•Audit trails
•Accounting accuracy
•Fraud detection
A credit balance means:
The client has overpaid or received an adjustment.
Credits may be:
•Applied later
•Refunded
•Left on account
Undocumented adjustments create:
•Audit concerns
•Client disputes
•Accounting inaccuracies
Open Item:
•Tracks each invoice separately
•Payments apply to specific invoices
Balance Forward:
•Carries one running balance
•Payments reduce the total balance generally
Open Item:
•Better detail
•Easier dispute tracking
Balance Forward:
•Simpler for some clients
•Easier for high-volume accounts
Alternate Billing allows:
•One client receives service
•Another account receives billing
Useful for:
•Fleet operations
•Corporate billing
•Warranty processing
•Parent company billing
Older receivables become:
•Harder to collect
•More likely uncollectible
Professional communication:
•Statements
•Reminder calls
•Follow-up contact
•Clear documentation
Documentation protects:
•Your business
•Your staff
•Your legal position
Regular reconciliation verifies:
•Correct balances
•Proper posting
•Accurate statements
•Financial integrity
Important reports:
•Aging
•Balances on All Accounts
•Individual Account Summary
•Transaction reports
Common causes:
•Incorrect posting
•Missing transactions
•Manual adjustments
•Deleted entries
•Posting to wrong accounts
Possible causes:
•Missing billing cycles
•Incorrect dates
•Unposted transactions
•Delayed period closing
Check:
•Billing cycle assignment
•Statement closing dates
•Posting dates
Delayed closing:
•Distorts statements
•Causes duplicate aging
•Creates reconciliation problems
Not every client should receive open credit.
Collections weaken quickly.
Old receivables become losses.
Creates balancing problems.
Transactions should not remain unresolved.
Creates statement confusion.
Leads to disputes and slow payment.
Creates audit problems.
Bank reconciliation becomes difficult.
Cash flow suffers.
Successful businesses:
•Grant credit carefully
•Send statements consistently
•Monitor aging regularly
•Follow up promptly
•Keep accurate records
•Communicate professionally
•Reconcile accounts monthly
•Resolve disputes quickly
Accounts Receivable is not just bookkeeping.
It is the management of your company’s future cash flow.