Learn about different Accounts Receivable (A/R) workflows in QuickBooks Desktop.

What is Accounts Receivable?

The record of money owed to your business for goods or services; that is, invoices for which your business hasn't received payment yet. Accounts Receivable is called A/R for short. (Even though the word "accounts" is plural, QuickBooks uses a single account on the chart of accounts to track all outstanding invoices.) Other terms for Accounts receivable are Notes and Collectibles.

What is QuickBooks Accounts Receivable account?

An account that QuickBooks automatically adds to your chart of accounts the first time you write an invoice. QuickBooks uses this account to track the money owed to your business. When you write an invoice or receive a payment from a customer, QuickBooks records the transaction in the register for your Accounts Receivable account.

Your Chart of Accounts lists the type of this account as "Accounts Receivable." If you need to use more than one of this type of account in your business, you can add additional "accounts receivable" accounts to the chart. When you have more than one accounts receivable account, QuickBooks lets you choose the account you want to use when you write an invoice or enter a customer payment.

It is important to record A/R transactions correctly to avoid wrong financial reports that can lead to incorrect tax payments and penalties.

Accounts Receivable workflows

There are five usual A/R workflows available in QuickBooks Desktop. To record your A/R transactions, choose one workflow that suits your business process and follow the steps in creating each transaction from your selected workflow.

Workflow 1: Estimate - Sales Order - Invoice - Payment - Deposit

Use this workflow if you need to send a proposal or quote to your customer that you will later turn to a sales order before you create an invoice and collect payments.

Important: Sales Order is only available in QuickBooks Desktop Premier or Enterprise.

AR workflow1

This workflow contains the following steps:

Workflow 2: Sales Order - Invoice - Payment Deposit

Use this workflow if you are not required to send proposals or quotes to your customers but you still need to use sales order to manage the sale of your products and services.

Important: Sales order is only available in QuickBooks Desktop Premier or Enterprise.

AR workflow 2

This workflow contains the following steps:

Workflow 3: Estimate – Invoice – Payment – Deposit

Use this workflow if your business requires creating/sending proposals or quotes which you do not need to turn into a sales order.

AR workflow 3

This workflow contains the following steps:

Workflow 4: Invoice – Payment – Deposit

Use this workflow if you are not required to send proposals or quotes to your customers and you do not need to create a sales order for managing the sales of your products and services.

AR workflow 4

This workflow contains the following steps:

Workflow 5: Statement Charges – Finance Charges – Statement – Payment – Deposit

Use this workflow if you bill your customers on a monthly basis. You can enter charges directly into the customer’s register (through Statement Charge) instead of creating individual invoices.

AR workflow 5

This workflow contains the following steps:

Other A/R-related transactions and tasks

Although not part of your usual A/R workflows, you may also find these other Customer-related transactions useful.