Small Business Accounting: Receivables, Invoices and Cash Flow

Day-to-day small business accounting, sometimes called pre-accounting or bookkeeping preparation, means recording customer and supplier balances, invoices, collections, payments and cash and bank movements as they happen. Done well, it answers three questions at any moment: who owes us, whom do we owe, and how much cash will we have in the coming weeks? It doesn't replace your accountant. It gives them, and you, clean data to work from.

Pre-accounting vs full accounting

Full accounting covers the general ledger, chart of accounts, tax returns, payroll and statutory reports, and is usually handled by an accountant or bookkeeper with dedicated software. Pre-accounting is the operational layer underneath:

Task	Who usually handles it
Customer and supplier balances, invoices, collections	Your team (pre-accounting)
Due dates, cheques and notes, customer statements	Your team (pre-accounting)
General ledger, tax returns, payroll	Your accountant or accounting software
Official invoicing rules, such as e-invoicing where required	Agreed with your accountant

Customer and supplier accounts

Every customer and supplier gets one account: in accounting terms, your receivables and payables. The balance follows a simple logic. Invoices increase what is owed, payments reduce it. To set accounts up properly:

• Record the legal name, tax ID and contact details in full.
• Set default payment terms. If a customer pays at 30 days, each invoice should get the right due date automatically.
• Set a credit limit where it matters. Seeing that a customer is over their limit before you accept the next order catches problems early.
• Start from opening balances. If you switch mid-year, enter each account's balance once, as of a specific date.

Invoices: draft, issue, cancel, never delete

The most common mistake is "fixing" an issued invoice by deleting and recreating it, which leaves gaps in the numbering and makes past figures hard to check. A clean process looks like this:

• Prepare the invoice line by line as a draft; subtotal, tax and total are calculated in one place.
• Issue it once checked. It gets its number and the amounts no longer change.
• If something is wrong, cancel it with a reason and issue a corrected one. The record and number stay, so the trail is intact.

Rules for official invoices differ by country, so confirm yours with your accountant.

Collections and payments

Each payment affects two accounts: the customer's or supplier's balance, and the cash or bank account the money moves through.

• Link payments to invoices where possible, so open and partially paid invoices are obvious.
• Money received before an invoice is an advance on the account; match it later.
• Always record the method: cash, bank transfer, card, cheque or promissory note.
• To correct a payment, reverse it and record the right one instead of rewriting history.

Cheques and promissory notes: not cash until they're due

In many markets, including Turkey and parts of the Middle East, post-dated cheques and promissory notes are an everyday way to settle trade. If you deal with them, one rule matters most: a document that isn't due yet is not cash.

• Record it on the day you receive it, with its due date.
• Keep it in a portfolio that doesn't count towards your cash balance.
• Review a list sorted by due date every week.
• Post it to cash or bank on the due date.

If your customers only pay by transfer or card, the same principle applies to any agreed future payment, such as an instalment plan: track the date, don't count the money early.

Statements and aging reports

An account statement lists every movement on one account over a period, with a running balance. Sending it is the easiest way to agree balances with a customer or supplier and find where any difference comes from.

An aging report groups open receivables by how overdue they are, for example: not yet due, 1–30 days, 31–60, 61–90 and older. It tells you whom to call first.

Cash-flow visibility

You don't need a complex model. Each week, put four figures side by side:

1. Today's cash and bank balances
2. Receivables by due date
3. Payables by due date
4. Cheques and notes in the portfolio by due date

That answers "can we cover payroll and suppliers at month-end?" before month-end arrives.

When do you need a tool for this?

A spreadsheet works for a handful of customers. It's time for a dedicated tool when you have to ask your accountant for a customer's balance, cheque due dates live in a notebook, partial payments make it unclear which invoices are open, or sales takes new orders without knowing what the customer owes. A pre-accounting tool doesn't replace accounting software or your accountant, but it makes the month-end handover faster and cleaner.

How VOLTR does it

The VOLTR ERP module focuses on this operational layer:

• Accounts: customer, supplier, cash and bank accounts in one list. Default payment terms set invoice due dates, an account over its credit limit is flagged without blocking sales, and each account takes one opening balance.
• Invoices: sales and purchase invoices with line items, prepared as drafts and then issued, or cancelled with a reason. An issued invoice is never deleted, and an invoice with collections can't be cancelled. Overdue sales invoices are flagged.
• Collections and payments: cash, bank transfer, credit card, cheque and promissory note. Linking a payment to an invoice is optional, and an overpayment becomes an advance.
• Cheques and notes are recorded on the day received. Those not yet due sit in the portfolio and don't affect the balance; the cash leg is posted automatically on the due date.
• Account statements show a running balance and a period summary, and can be printed from the browser.
• Reports: aging, collections and cash/bank.
• CRM link: an account can be linked to the company record in the CRM, so sales and collections are tracked on one platform.

Statutory books, tax filings and any e-invoicing obligations stay with your accountant.

Frequently asked questions

Is pre-accounting the same as bookkeeping?

It's the day-to-day part of it: recording invoices, payments and balances. Statutory bookkeeping and tax filings build on that data.

Do I still need an accountant?

Yes. A pre-accounting tool gives you and your accountant clean, current data; legal and tax obligations remain their area.

How should I record a post-dated cheque?

Record it on the day you receive it, keep it in a portfolio with its due date, and move it into cash only when it's due.

Can I start in the middle of the year?

Yes. Enter an opening balance for each account as of a specific date, then record new transactions from there.

To see balances, invoices and collections in one place, open a free VOLTR account and add ERP from the Subscription section in the app. Current module prices are on the pricing page.