Help your cashflow by staying on top of your accounts receivable and accounts payable

One of the most frequently asked questions in the accounting world is about the difference between accounts receivable and accounts payable. So what do these terms mean?

Well, basically, they are terms used to record the money coming into or going out of your business. If you look after your own bookkeeping, these are the cashflow entries you’d make in your company’s general ledger.

  • ‘Accounts receivable’ shows the money owed to your business from customers; this is usually known as assets.
  • ‘Accounts payable’ shows the money that your business owes – to suppliers or other creditors, such as for rent, utilities or professional fees. These are your liabilities.

You may have differing payment terms for your ‘receivables’ – and the timescale you allow is known as the ‘collection period.’ If the money you owe to other people is due in a shorter timescale than the timescale you’ve set to be paid, you could face a cashflow problem and find it difficult to pay your debts.

Nordens Chartered Accountant and Business Advisers | Strategic Business Planning | London | Essex | Award winning accountant

This is why it’s really important to monitor your cashflow carefully; many businesses fail simply because their outgoings exceed the money coming in – even when there’s money that is legitimately owed to the company, but the invoices remain unpaid.

Staying on top of your accounts payable is an important way of making sure you have a clear picture of your business finances, and ensuring that your credit rating remains good – hopefully without needing to nag your clients to pay up or, worse, having to threaten them with late payment fees and interest.

If you’re finding all this boring or mundane, you haven’t got a head for numbers or you just want to get on with doing what you do best and running your business, rather than worrying about recording stuff in ledgers, take a look at our own award-winning bookkeeping service,  Accounting2You. In one smooth sweep it takes away your accounting headaches.

One of the reasons we like to meet with clients and review their books on a quarterly basis is to avoid the kind of nasty cashflow issues that can ruin an otherwise successful business. But that’s not the only reason.  On a much more positive note, completing accounts once a year might work for some people, but for those that are interested in tangible growth, regular reviews let the business owners see exactly what’s going on – and nip any problems in the bud.

If you’d like to take us up on our offer of a free consultation, we can explain to you in more detail how this would make your business more profitable. Click the green button to let us take away your bookkeeping worries and improve your cashflow, so that you can get on with taking care of your business.

 
Beyond Accountancy

At Nordens, we're more than just accountants - we're business experts who can help you achieve your biggest goals.

Nordens Strategic

Our specialist strategic division at Nordens boasts some of the leading entrepreneurial business minds in the country. We cater towards delivering consistent success stories, whilst helping businesses achieve above and beyond their initial goals.

Through highly-tailored guidance, coaching and advice, Nordens Strategic are able to define exactly how your business can reach new levels of success.

Regardless of how you define ‘success’ for your business, our strategic service is guaranteed to bring about real and lasting change. By partnering with some of the UK’s top business coaches, we’ll steer you along the path to a greater future.

Accounting 2 You

Every business, no matter how big or small, needs to make the right decisions, and how to best manage your accounts can put huge question marks over your business. Accounting2You is here to take that pressure off and provide you with all the answers you need.

Our bookkeeping branch offers a fully inclusive, comprehensive service that you can trust. Since 2005, our specialist bookkeepers have been successfully managing the accounting of both individuals and small businesses.

With experts in payroll analysis, credit control and financial recording, Accounting2You will lead your business efficiently, and with real purpose, towards a prosperous future.

Voted as EXCELLENT - 9.9 out of 10 based on 174 reviews

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Chris Dyer

Director - Metro Bank

Nordens are always very easy to deal with and extremely professional and efficient. I would have no hesitation in recommending them to my clients for their accountancy needs, no matter how complex they may be.

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Jamie Brown

Co-Founder - Chicmi Limited

Very good to work with - the team go above and beyond to make the accounts easy and efficient. They're all super friendly and a joy to work with.

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Simon Rose

Director - Rose Opticians

I have been using Nordens Chartered Accountants for 5 years and very happy with the service provided. All members of the team are very knowledgeable and have a wealth of experience which has proved very beneficial to my organisation

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Rebecca Bossick

Founder & Director - Physio LDN

Very easy to contact and put me in touch with the right person whenever I need to ask any questions. Extremely knowledgeable and can help me manage my various businesses whenever I need.

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James Aconley

Principal - Pauline Quirke Academy

Great accountants, always available to offer advice. The team have transformed my business.

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Christopher Wilce

Founder - Dataphone

Having worked with Nordens over the last 5 years, not only to look after my annual accounts but they have also provided outstanding professional advice. They have guided me through a Company share buyback with clear and objective advice. We have also been using Nordens strategic services for a couple of years, which has helped bring about significant improvements that exceeded my expectations. With experience of working with several local accountants over my 29 years in business, I’m very pleased with the service I have received from Nordens.

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Dave Hodges

Director - Linekers

Trusted our business with Nordens for over 10 years now and watched the company grow into the successful innovative business it has become today. Deservedly so. Every aspect of financial advice we need is always given promptly and with a smile. We have total confidence in all aspects of advice Nordens give. If you are looking for accountants, its a no brainer!

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Tony Charles

Founder - Foundation Sports Limited

A fantastic, modern, vibrant firm that care about the clients and their staff in abundance. It is rare to find an Accountancy firm with such vibrance and focus and relationships. It is no wonder they win award after award in their field.

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Peter Horlock

Managing Director - Prime Time Boilers

I have been with Nordens for many years now and they are a great accountants.

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Simon Cushing

Founder - Vivid Finishes

We have used Nordens for the last 5 years and have had a great service throughout. The guys are very passionate about what they do and have played a part in the growth of our company, highly recommended.

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Andrew Martin

Managing Director - AMD Interior Architecture

Great Service at Nordens from a friendly very approachable team Particularly Kirsty Willis and Joe Sword who have been helping us since we started the business in 2016.

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James Robinson

Director - Forma London

Nordens provide a first class service. We moved to Nordens last year and have been impressed with the level of service provided. Keep up the good work!

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Accounting 2 You

In November 2002, having sold our other business interests off earlier in the year, I decided to set up Nordens Chartered Accountants. The easy part was knowing how to do it, as I had established and built a smaller practice a few years earlier. The difficult part, for me, was not following the traditional accountancy path. Having run businesses, both successfully and unsuccessfully, I wanted to help business owners resolve their short term problems and work with them to achieve their longer term goals. Business has always been my interest and I love that I can help business owners achieve what seems like the impossible every single working day.

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