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Managing Outstanding Balances

10 minutes

Tutorial 8.5: Managing Outstanding Balances

Introduction

Not every customer pays in full at checkout. Some salons allow partial payments, customer accounts, or encounter situations where full payment isn't collected. Managing outstanding balances properly ensures you track money owed and follow up systematically. This tutorial covers tracking unpaid amounts, using the Accounts Receivable report, and recording late payments.

Who this is for: Owners, Admins, and Managers who handle payments and follow-up on outstanding balances.

What you'll learn:

  • Understanding partial payments and unpaid transactions
  • Viewing outstanding balances by customer
  • Using the Accounts Receivable report
  • Recording payments on existing transactions
  • Following up on unpaid amounts

Time to complete: 10 minutes

Prerequisites

Before you begin:

  • Complete Tutorial 8.1 (Understanding Transactions and Payment Status)
  • Understand your salon's payment terms

Step-by-Step Instructions

Step 1: Understanding Outstanding Balances

An outstanding balance exists when transaction total exceeds payments received.

Payment status recap:

Status Total Paid Outstanding Balance
Unpaid £0.00 of £100.00 £100.00
Partial £30.00 of £100.00 £70.00
Paid £100.00 of £100.00 £0.00

Common scenarios creating outstanding balances:

Scenario Example
Customer tab/account Regular customer, pays monthly
Partial payment at checkout Customer pays £50 of £100, promises rest later
Deposit only paid Deposit recorded but full balance not yet collected
Payment plan Agreement to pay in instalments

Step 2: Accessing the Accounts Receivable Report

The Accounts Receivable report shows all customers with outstanding balances.

To access:

  1. Navigate to Reports in the sidebar
  2. Under Financial Reports, click Accounts Receivable

Report summary shows:

  • Total Outstanding - Sum of all unpaid amounts
  • Customers with Balance - Number of customers owing money
  • Average Balance - Average amount per customer
  • Oldest Overdue - Days since oldest unpaid invoice

Filtering the report:

Use the filters at the top of the report to narrow results:

  • Min Balance - Show only customers owing at least this amount
  • Days Overdue - Filter by how long balances have been outstanding (7+, 14+, 30+, 60+, or 90+ days)
  • Unpaid Invoices - Filter by number of unpaid transactions (2+, 3+, or 5+ invoices)

Click Apply to update the report with your filters, or use the reset button to clear all filters.

Step 3: Reading the Accounts Receivable Table

The report table displays:

Column Description
Customer Customer name (click to view profile)
Email Contact email address
Phone Contact phone number
Unpaid Number of unpaid transactions
Outstanding Total amount owed
Oldest Invoice Date of oldest unpaid transaction
Days Overdue How long since oldest invoice
View Quick link to customer profile

Sorting options:

  • Click column headers to sort
  • Sort by customer name, outstanding amount, unpaid count, or days overdue
  • Identify highest balances or oldest debts

Days overdue colour coding:

  • Grey text: 0-30 days (current)
  • Yellow: 31-60 days (attention needed)
  • Orange: 61-90 days (follow up required)
  • Red: 90+ days (urgent attention needed)

Step 4: Viewing Customer Outstanding Balance

From customer profile:

  1. Navigate to Customers in the sidebar
  2. Search for and open the customer
  3. Click the Transactions tab
  4. Use the status dropdown to filter by Unpaid or Partial
  5. See all transactions with amounts owed

Quick route from report:

  1. In Accounts Receivable report, click the customer name or the View link
  2. Goes directly to customer profile with a return link back to the report
  3. View their transaction history and contact details

Step 5: Recording a Late Payment

When a customer pays their outstanding balance:

From the customer profile:

  1. Navigate to the customer's profile (via Customers or from the Accounts Receivable report)
  2. Click the Transactions tab
  3. Find the unpaid/partial transaction
  4. Click to open the transaction
  5. Add the payment and complete the transaction

From the POS page:

  1. Navigate to POS in the sidebar
  2. Search for the transaction by number or customer name
  3. Click to open transaction details
  4. Record the payment received

After recording:

  • Transaction payment status updates (Unpaid → Partial or Paid)
  • Customer outstanding balance reduces
  • Accounts Receivable report updates automatically

Step 6: Exporting the Report

To export accounts receivable data:

  1. Open the Accounts Receivable report
  2. Apply any filters you want included in the export
  3. Click the Export button in the table header
  4. Choose your format:
    • Export as CSV - Spreadsheet format for Excel, Google Sheets, or accounting software
    • Export as PDF - Formatted document for printing or sharing

Export includes:

  • Customer name and contact details (email, phone)
  • Outstanding amounts
  • Number of unpaid transactions
  • Oldest invoice date
  • Days overdue

The export respects your current filters, so you can export specific segments (e.g., only balances over £100 or only 90+ days overdue).

Step 7: Following Up on Outstanding Balances

Follow-up timeline suggestion:

Days Overdue Action Method
0-7 days Friendly reminder Email or SMS
8-14 days First reminder call Phone
15-30 days Second reminder Phone + email
30+ days Escalate to manager Direct contact

First reminder template:

Hi [Customer Name],

I hope you're well. I noticed there's an outstanding balance
of [Amount] on your account from your visit on [Date].

You can settle this:
- At your next visit
- By card payment over the phone

If you've already paid, please let us know so we can update
our records.

Thanks,
[Your Name]
[Salon Name]

Step 8: Outstanding Balance Permissions

Action Owner Admin Manager Staff Receptionist
View Accounts Receivable report ✓ ✓ ✓ ✗ ✗
View customer balances ✓ ✓ ✓ ✓ ✓
Record late payments ✓ ✓ ✓ ✓ ✓
Export report ✓ ✓ ✗ ✗ ✗

Note: Receptionists can view customer transactions directly from customer profiles but cannot access the Accounts Receivable report.

Common Pitfalls

"Customer says they paid but it's not showing"

Check:

  • Was payment recorded on the correct transaction?
  • Was the transaction completed after payment added?
  • Could it be on a different transaction?

Review all customer transactions to reconcile.

"Can't find customer's outstanding balance"

Outstanding balances exist on completed transactions with payment status unpaid or partial. If transaction is pending, it won't show in the Accounts Receivable report. Complete the transaction first.

"Too many small outstanding balances"

Consider your policy:

  • Set minimum threshold for follow-up (e.g., don't chase under £5)
  • Ensure payment is collected before customers leave
  • Train staff to confirm full payment

"Customer disputes the amount"

Review transaction together:

  • Show itemised receipt
  • Verify items and prices
  • If error found, process correction
  • Document the resolution

Tips and Best Practices

  1. Review weekly - Check the Accounts Receivable report weekly to catch outstanding balances early.

  2. Follow up promptly - Contact customers within 7 days of an unpaid balance. Older debts are harder to collect.

  3. Make it easy to pay - Offer multiple payment options (phone, in-person, bank transfer).

  4. Be consistent - Apply your payment policy consistently to all customers.

  5. Document contact - Keep notes on when you contacted customers about balances.

  6. Train staff - Ensure all staff confirm payment before customers leave.

  7. Set expectations - Display payment policy clearly at reception.

  8. Flag repeat offenders - Note on customer profile if they frequently leave balances unpaid.

Related Tutorials

  • Tutorial 8.1: Understanding Transactions and Payment Status
  • Tutorial 8.4: Deposits and Pre-Payments - Using deposits to reduce outstanding balances
  • Tutorial 3.1: Adding and Managing Customer Profiles - Customer contact information

Frequently Asked Questions

How long should I chase outstanding balances?

Industry standard: Active collection up to 90 days. After 90 days, balance becomes unlikely to collect. However, most collection happens in the first 30 days - act quickly.

Can I refuse service to customers with outstanding balances?

Yes. Your policy might state "Services require full payment of outstanding balances first". Apply consistently.

What if customer disputes a non-payment?

Show transaction details and payment history. Review together. If legitimate dispute, investigate and resolve. If customer is mistaken, explain clearly.

How do I handle employees with outstanding balances?

Apply the same policy as regular customers. Consider whether payroll deduction is appropriate (with employee agreement).

Do outstanding balances affect reports?

Yes. Revenue reports show the sale, but cash flow reports reflect when payment is received. Outstanding balances represent money owed, not received.

Can I write off bad debt?

Contact your Owner/Admin. Uncollectable balances should be documented and may be written off for accounting purposes after appropriate follow-up attempts.

Last Updated: January 2026