Industry sector: Business services

Accountant: Cash from debtors

'Cash from debtors' means any income you receive from clients that you send an invoice to. After they have been sent an invoice but before they pay, they are your debtors. When they pay you, the payment is referred to as Cash from debtors.

Most of your income is likely to come from clients that you invoice for work done. You will include in your fee notes any disbursements that you have made on your client's behalf.

Payment terms

It's a good idea to set out your payment terms in your letter of engagement so that there is no confusion as to when invoices should be settled. You might, for example, state on your invoice that payment must be made within, say, 28 days of the invoice date.

Make an estimate of the amount of income you are likely to receive from account customers each month, including VAT. Enter the amount in your cash flow in the month in which the money is due to be received.

Consider what steps you will take to recover any overdue amounts and whether interest will be charged on these.

Your business stationery

Have some invoices printed for your clients. A good printer will be able to advise you on layout, style and even content. If you are registered for VAT you must include your VAT registration number on your invoices.