Accounts Receivable

Accounts receivable is the money customers owe you for work already delivered but not yet paid, the total of your outstanding invoices. It sits on your books as an asset, but it is not cash until it actually lands in your account, and that gap is where many otherwise healthy businesses get into trouble.

For a lean founder, watching receivables is watching your near-term cash. A growing receivables balance can look like success, more invoices out, more revenue booked, while quietly meaning more of your money is trapped in other people's accounts. The number to watch is how long invoices take to get paid: the longer the average, the more working capital you are effectively lending your customers for free.

Say you're running your books in Moneybird. Every invoice you send sits there as a receivable until it clears, so the open-invoice list is literally your AR ledger, and the overdue filter tells you exactly whose money you're still waiting on. From there you can pull those overdue invoices into Make and fire a polite chase email three days after a due date passes, so follow-up happens on a schedule instead of whenever you remember. And if you want the trend on a wall, push the days-to-pay figure into a Databox board and watch whether your average is creeping up before it becomes a cash squeeze.

Tighten this, with shorter payment terms, prompt invoicing, deposits up front, and firm follow-up on late payers, and you free cash without making a single extra sale. In a cash-constrained business, your receivables process is as important as your sales process.