How to Fix an Overstated Accounts Receivable Balance in Your Local Service Business

If your accounts receivable account is showing a higher balance than you know is accurate, it’s likely due to invoices that should be marked as paid but aren’t. This is a common issue for local service businesses, especially when using field management software like Jobber, Workiz, or ServiceTitan. These platforms are typically the main hub for tracking invoices and payments, so ensuring they’re properly synced with your accounting software is key. Let’s walk through the steps to identify and fix the problem.

1. Start with Your Field Management Software

For most local service businesses, the field management software is the first place to check. Here’s what to do:

• Review unpaid invoices: Go through your list of open invoices and confirm that all payments (cash, check, credit card, etc.) have been recorded in the software.

• Check payment sync status: Ensure that your software is correctly syncing with QuickBooks or your accounting system. Sync errors are a common culprit—when data doesn’t transfer properly, payments may not be reflected in your accounts.

• Resolve sync errors: Look for any unresolved errors in the sync log and address them. Many businesses let these errors pile up over time, which can prevent payments from appearing in QuickBooks and inflate your accounts receivable balance.

2. Review Your Accounts in QuickBooks

Once you’ve cleaned up your field management software, it’s time to check QuickBooks directly:

• Run an accounts receivable report: Generate a report of all invoices currently listed as unpaid.

• Sort through customer balances: For each outstanding balance, verify whether the customer genuinely owes money or if a payment was missed in QuickBooks.

  • Common issues include:

    • Payments not applied to invoices.

    • Missing records of cash or check payments.

    • Refunds that weren’t properly documented.

• Resolve discrepancies: Apply payments to the correct invoices, document any missed transactions, and clear out any false balances caused by sync issues or bookkeeping oversights.

Final Thoughts

Fixing an overstated accounts receivable balance takes time and effort, but it’s an essential part of maintaining clean, accurate financial records in your local service business. By starting with your field management software and then working through QuickBooks, you can ensure that all payments are properly documented and your accounts receivable reflects the amount customers owe you. This process helps you stay on top of customers that still owe you.

If you’re overwhelmed by this process, contact Holmberg Ledger Co. to get it done for you.