Set Clear Payment Terms on Every Invoice

Every invoice your business sends must state payment terms explicitly — Net 15, Net 30, or due on receipt. Vague accounts receivable invoicing without defined due dates gives clients an excuse to delay payment indefinitely. Clear invoicing terms set expectations from the start and give you a defined date to begin follow-up collections.

Automate Invoice Delivery Immediately

Configure your accounts receivable system in QuickBooks Online or Xero to generate and send invoices automatically the moment work is completed or goods are delivered. Delayed invoicing delays payment. Businesses that send invoices even one week late extend their accounts receivable collection cycle by 30 days or more on average.

Review Accounts Receivable Aging Weekly

Run your accounts receivable aging report every week, not monthly. Invoices that slip past 60 days become significantly harder to collect. Weekly aging reviews let you escalate follow-up on overdue accounts receivable before balances reach 90 days — the point where bad debt risk increases sharply and cash flow suffers the most.

Claim Bad Debt Deductions Properly

When accounts receivable become uncollectible, you can claim a bad debt deduction under ITA paragraph 20(1)(p) on your T2 corporate tax return. This accounts receivable write-off directly reduces your taxable income. Without proper invoicing records and documented collection efforts, CRA denies the deduction — costing you tax on money you never received.

Send Automated Payment Reminders

Set up automated accounts receivable reminders at 7 days, 14 days, and 30 days past the invoice due date. Consistent invoicing follow-up recovers payments faster without manual effort. Businesses that rely on memory-based collections routinely carry 20% to 30% more in overdue accounts receivable than those with automated reminder systems.

Reconcile Payments to Invoices Daily

Every incoming payment must be matched to its specific accounts receivable invoice on the day it arrives. Unmatched payments create orphan credits in your books that distort your receivable balance and financial statements. Clean accounts receivable reconciliation also ensures your HST collected ties accurately to your GST/HST return filed with CRA.

Integrate Payment Processing With Invoicing

Connect Stripe, Rotessa, or direct bank payment links directly to your invoicing system so clients can pay the moment they open the invoice. Accounts receivable with integrated payment options reduce collection time by eliminating friction. Fewer steps between invoice delivery and payment means faster cash inflows and lower outstanding receivable balances.

Track HST Collected on Every Invoice

Your accounts receivable invoicing must show the GST/HST registration number, HST amount, and description of supply on every invoice. CRA requires these elements for your clients to claim their input tax credits and for your own HST return compliance. Missing invoicing details trigger CRA review letters and potential penalties on your HST account.

Segment Receivables by Client Risk

Categorize your accounts receivable by payment history — reliable, slow, and high-risk. Focus collection energy on high-risk accounts receivable before they age past 90 days. This invoicing and receivable segmentation also helps your CPA identify which balances qualify for bad debt reserves, reducing taxable income on your corporate tax return proactively.

Report Receivables for Tax Planning

Your accounts receivable balance directly affects your corporation's taxable income timing. Revenue is recognized when invoiced, not when paid, so large outstanding accounts receivable mean you owe corporate tax on income you have not collected yet. Accurate invoicing and receivable reporting lets your CPA plan instalment payments and avoid cash shortfalls at tax time.