Cloud Accounting for A&E Firms, Part 3: Accounts Receivable

When you perform a service for a client, and the client does not pay at the time of service or in advance, then you have an account receivable, which is recorded in your books as an asset.  An account receivable is money owed to you for services already performed or provided.  It is important to manage accounts receivable, to get paid within an agreed time frame, to manage cash flow, and to keep an accurate balance sheet.

Your accounts receivable system should integrate with your accounting software. It should keep a record of when customer invoices are due and whether they have been paid, in part or in full. In addition, it should provide a means to receive ACH payments and/or credit card payments.  When applicable, the accounts receivable system should be capable of applying credits to a customer invoice. In addition, the accounts receivable system should be capable of managing customer contact information and sending customer invoices. And finally, the accounts receivable system should support invoicing with additional attachments, to meet detailed invoicing requirements, which are common in architectural billing.

Although best known as an accounts payable system, is also capable of managing your accounts receivable. If you are already using for accounts payable, then you already have an accounts receivable solution, although you may have to configure your account to use the accounts receivable function. A benefit of using for accounts receivable is the ability to receive ACH payments, without paying a percentage-based fee on funds received (e.g., a 1% fee is typical).  Rather, you pay a fixed fee for the monthly service.

Next, we consider a concept of operations for accounts receivable management using and QuickBooks Online. You have a customer invoice, which has already been published to QuickBooks using your records management application.  Your account is integrated with your QuickBooks account, and the accounts are automatically synchronized once per day. The customer invoice has been posted to through the synchronization process. 

When it is time to send invoices, usually at the end of the month, your office manager opens the invoice in your account, and she attaches a detailed invoice, with information including the percentage of completion for each phase of the project, the amount previously billed, and the amount due for this invoice.   The invoice is sent by email to your client, who has an option to pay online by ACH transfer, using a link provided in the email. Each client is invoiced in a similar fashion, using  When an invoice is paid by check or by ACH transfer, the office manager opens the invoice in, and she marks it as paid.  This paid status is then communicated to QuickBooks Online during the daily synchronization process.