How Do I Track Money Customers Owe My Business?

By Bill Stilwell · Last reviewed October 17, 2026

The short answer

Accounts receivable is the money customers owe you for work you’ve already done or products you’ve delivered. Track it with an aging report that groups unpaid invoices by how late they are, check it every week, and follow up on a set schedule. Money you’ve earned but haven’t collected can’t pay your bills.

What this means

When you send an invoice and the customer hasn’t paid yet, that amount sits in accounts receivable, often shortened to A/R. It’s an asset on your balance sheet. It isn’t cash.

An aging report sorts what’s owed by how long it’s been unpaid. A common setup uses columns like current, 1 to 30 days late, 31 to 60, 61 to 90, and over 90. Most bookkeeping software builds this report for you.

The Small Business Administration (SBA) lists accounts receivable among the things someone in the business should be responsible for.

Made-up example: Ironwood Electric does commercial jobs on 30-day terms. Every Monday, the office manager runs the aging report. Anything 1 day late gets a friendly email. At 15 days late, she calls. At 45 days, the owner calls. The number of invoices that slide past 60 days has dropped, and nobody has to have an awkward conversation months later.

Why it matters

You can be profitable and still run out of cash if customers pay slowly.
Older debts are harder to collect. The longer an invoice sits, the less likely you’ll get paid.
Unclear records cause fights. If you can’t show what was billed and paid, a reminder can feel like an accusation.
It affects your taxes. Whether unpaid invoices count as income yet depends on your accounting method (see 10.1.4 Accounting Method).

Who this applies to

Any business that lets customers pay after the work. If every customer pays in full up front or at the register, you’ll have little or no receivables to track.

How to do it

Send every invoice from your bookkeeping or invoicing software so it shows up in receivables (see 10.5.5 Invoice Records).
Set clear payment terms on every invoice, like “Due in 15 days” (see 10.7.5 Invoices and 11.1.6 Payment Terms).
Run the aging report every week.
Set a follow-up schedule and stick to it. For example: reminder on the due date, call at a set number of days late, owner call after that.
Log every contact on the invoice or customer record: date, method, and what was said.
Record payments right away against the correct invoice.
Decide when an invoice moves to collections or is written off, and who approves it (see 16.6.5 Late Payments and Collections).
Reduce risk on future jobs with deposits or progress payments for larger work (see 10.7.2 Deposits).
Review totals monthly with your other reports (see 10.5.8 Financial Reports).

What proof to keep

Weekly or monthly aging reports
Notes on every follow-up contact
Payment records tied to invoices
Write-off approvals with reasons

Common mistakes

Waiting until you need the money to start chasing it.
No written terms, so the customer doesn’t know when payment is due.
Payments recorded but not matched to invoices, so the aging report is wrong.
Following up rudely or in public. Keep it private, polite, and factual.
Doing more work for a customer who already owes you without a plan to collect.

When to get help from a pro

A bookkeeper can run the aging report and send reminders. An attorney can explain your options for large unpaid debts, including collection rules in your state. Questions to ask:

What payment terms make sense for my kind of work?
At what point should I send an unpaid invoice to collections?
What rules apply in my state when I try to collect a debt?

Bill’s note

[Bill: add a short note. For example, the payment terms and reminder schedule you use for SiteSmarty, or how a clear reminder process kept a late payment from becoming a bad review.]

How I did this for SiteSmarty

[Date I did this:]
[What I actually did, step by step: how often I run the aging report and the reminder schedule I use]
[What it cost and how long it took:]
[What surprised me or what I’d do differently:]
[Screenshot or photo to add, with private info blurred: the accounts receivable aging report]
[Result so far:]

Questions people ask

What is an aging report? A list of unpaid invoices grouped by how late they are, like current, 1 to 30 days, 31 to 60 days, and so on.

How often should I check it? Weekly is a good habit. At minimum, check it every month.

When should I follow up? Start on or right after the due date, then follow your schedule.

Is accounts receivable the same as revenue? No. Revenue is what you earned. Receivables are the part of it you haven’t collected yet.

Audit check

Question: Does the business review an accounts receivable aging report on a set schedule and follow up on late invoices with logged contacts?
Pass looks like: Weekly or monthly aging reports saved. Written payment terms on invoices. Follow-ups logged. Clear write-off approvals.
Fail looks like: No aging report. Payments not matched to invoices. Old balances nobody has contacted. Customers surprised by what they owe.
Evidence to collect: The last three aging reports, follow-up notes for the oldest five balances, and written payment terms.

Where this fits

Do this first: 10.5.5 Invoice Records

Do this next: 10.5.7 Accounts Payable

Sources

Small Business Administration, "Manage your finances" (checked October 17, 2026)
IRS, Publication 583, "Starting a Business and Keeping Records" (checked October 17, 2026)

This page explains general rules and Bill's own experience. It is not legal, tax, or insurance advice. Talk to a qualified professional about your situation.