Accounts receivable: Connect invoices to incoming payments

The receivable path

Worked combined-payment example

A customer owes two invoices: €900.00 and €600.00. One bank receipt of €1,500.00 references both. Allocate €900.00 to the first and €600.00 to the second; do not create a new €1,500.00 sale from the payment.

If the receipt is €1,480.00, keep €20.00 open until a discount, fee, deduction, or second payment is evidenced.

The example shows settlement mechanics. Recognition, VAT, and any write-off need professional assessment.

The evidence chain DeinHans prepares

For a synthetic June month, one €900 invoice and one €600 invoice are recorded as two sales events. A single €1,480 bank receipt arrives in July with an incomplete reference. DeinHans can present both invoices as candidates, prepare the supported €900 and €580 allocation, and keep €20 open rather than creating new revenue from the receipt or silently applying a discount.

The prepared packet includes the issued documents, customer identity, invoice and due dates, bank reference, allocation rationale, remaining amount and any owner response. The accountant reviews recognition, VAT, corrections and any write-off. The owner decides the commercial follow-up.

Questions for old balances

• Was the invoice sent and accepted?
• Is the service or customer disputed?
• Did payment arrive through another channel?
• Was a credit or refund recorded separately?
• Was a combined payment allocated incompletely?
• Does the customer record refer to the same legal entity?
• Is professional correction or collection action required?

Roles

The owner confirms customer relationship, service, dispute, and expected payment. Software can show open balances and suggest bank allocations. The accountant reviews treatment and corrections.

DeinHans can keep the payment suggestion attached to the invoice evidence and make residuals visible. It is not a CRM, customer-billing, dunning or collections system; it does not send reminders or decide that a balance is irrecoverable. Matching the bank row is a settlement-preparation step, not approval of the original sale.

Month-end result

The receivables list should reconcile to invoice histories and allocated payments. Each material balance has a status, next action, and source. That gives the owner a collections view and the accountant a reviewable accounting record.

Build a useful ageing view

Group balances by due status, but keep disputed, promised, partly paid and credit balances separately identifiable. The clock should start from the agreed due date, not whichever date happens to be available in the bank feed. For each material overdue balance, record the latest customer contact, promised payment date, dispute reason and owner. That turns ageing into an operating list rather than a decorative report.

Compare the closing receivable total with the corresponding accounting balance. Differences often come from unposted sales, cash posted without allocation, credits applied only on one side or cut-off mismatches. Resolve the bridge instead of editing the ageing total to fit.

Collections and accounting are related, not identical

A collection reminder is a commercial action; a bad-debt adjustment or write-off is an accounting and tax decision. A customer can be late without the receivable becoming irrecoverable. Conversely, a formal dispute or insolvency signal may need professional attention before the standard reminder cycle ends.

Protect customer relationships by checking evidence before contact. Confirm the invoice was issued to the correct entity, delivered through the agreed channel and not already paid through a platform or different account. Retain a remittance explanation with the final allocation so the same question does not return next month.

Customer balance confirmation

For material or disputed accounts, prepare a concise history of invoices, credits, allocations and correspondence. Confirm the legal customer entity and avoid sharing documents with an unrelated contact at the same brand. Where confirmation is used, record date, scope, response and every difference investigated.

At close, identify credit balances separately. They may represent overpayment, unapplied cash, a refund obligation or a posting error. The next action and professional treatment depend on evidence; a credit customer balance should not disappear into revenue simply because it is old.