Accounts Payable & Accounts Receivable Management for Modern Businesses | Aorabook ERP
Every business runs on two basic financial movements:
Paying suppliers
Collecting money from customers
If these two are not controlled properly, even a profitable business can face cash flow problems. This is why modern businesses manage Accounts Payable (AP) and Accounts Receivable (AR) using ERP—not Excel.
Aorabook ERP automates payable and receivable tracking so you always know:
Who you need to pay
Who needs to pay you
How much is overdue
What your real cash position is
Understanding Accounts Payable & Accounts Receivable
Let’s understand this in very simple terms.
Accounts Payable (AP)
→ Money your business owes to suppliers
Accounts Receivable (AR)
→ Money customers owe to your business
Aorabook treats these as control accounts, not manual calculations.
Common Problems Faced When Manually Maintaining AP & AR
Businesses managing AP & AR manually usually face:
Missing supplier payments
Forgetting customer dues
No clear outstanding balance
Confusion during the month-end closing
Weak cash flow planning
What You Can Do with AP & AR in Aorabook ERP
Using Aorabook ERP, you can:
Maintain separate supplier and customer ledgers
Automatically create AP & AR balances from invoices
Track partial and full payments
View real-time outstanding balances
Generate AP & AR aging reports
Maintain clean audit trails
See instant impact on the balance sheet and cash flow
Step 1: Supplier & Customer Setup
First, create suppliers and customers in the system.
When I create:
A Supplier → Aorabook links it to an Accounts Payable ledger
A Customer → Aorabook links it to an Accounts Receivable ledger
We don’t need to manually choose ledgers— Aorabook handles it automatically.
This ensures correct posting from the very first transaction.
Navigate to:
Sidebar > Contacts > Add Contacts
Contact can add with the details of:
Name, Email & Password
Mobile number & Profile picture
Route & location details
Contact type & category
Business information
Credit limit
Billing & Shipping Address
Payment method
Opening Balance
Contact default TAX code
Remarks for contact
Step 2: Purchase invoice, How a Payable is created
Let’s start with Accounts Payable.
Purchase Invoice Example:
Product 1 - 20*5 = 100 - VAT 5% - 5
Product 2 - 30*5 = 150 - VAT 5% - 7.5
Product 3 - 10*5 = 50 - VAT (Zero-rated) - 0
Product 4 - 15*5 = 75 - VAT exempt - 0
here,
Ivoice total = 375
VAT amount = 12.5
When I save a purchase invoice, Aorabook automatically posts:
Inventory Dr 375
Purchase / Input VAT Dr 12.5
Supplier / Accounts payable Cr 387.5
What This Means:
The supplier shows a credit balance
This balance represents Accounts Payable
You now know how much you need to pay
No manual Account Payable entry is required.
Navigate to:
Sidebar > Purchase > New order
Now check the chart of accounts / Partner Accounts:
Add more purchases:
Supplier test 2
Product 1 - 10 units
Product 2 - 10 units
Supplier test 3
Product 4 - 5 units
Product 1 - 7 units
Product 3 - 10 units
Supplier cost line USD 50
Here,
total purchase - 315
Supplier cost - 50
Purchase VAT - 7
Step 3: Paying a Supplier
We can make supplier payment from multiple ways in our system.
First, from the purchase list.
Navigate to
Sidebar > Purchase > Purchase orders > Select button > Payment
Second, from the supplier profile
Navigate to
Sidebar > Contact > Supplier > Supplier profile > Bill payment
Third, from the journal.
Navigate to,
Dashboard > Add new > New journal
Sidebar > Account > Journal > Add new journal
Here, you have to select the partner account for the selected accounts payable balance reduction.
Now I pay the supplier test 1 bill:
Payment from Purchase list:
Select the payment method
Quick cash availability
File attachment availability
Given the discount amount
Finalize the payment
When we pay the supplier from any of the three options, the journal will:
Supplier test (AP) Dr 387.5
Cash in test branch Cr 387.5
The supplier profile balance will show the reflection. The balance is 0 now.
ERP automatically:
Reduces payable balance
Updates the supplier ledger
Updates cash/bank balance
Everything stays synchronized
Step 6: Sales Invoice
Now let’s sell a product.
Example:
Product 1 - 50*10 = 500 - VAT 5% - 25
Product 2 - 60*10 = 600 - VAT 5% - 30
Product 3 - 15*10 = 150 - VAT (Zero-rated) - 0
Product 4 - 20*10 = 200 - VAT exempt - 0
here,
Ivoice total = 1450
VAT amount = 55
Now let’s look at Accounts Receivable.
Sales amount: 1505
Customer: Customer Test 1. 1505
Aorabook automatically posts:
Customer / Account Receivable Dr 1505
Sales Revenue Cr 1450
Sales / Output VAT Cr 55
What This Means:
The customer shows a debit balance
This balance represents Accounts Receivable
You now know how much you need to collect
Step 5: Receiving Payment from Customer
When the customer pays, we can make customer payment from multiple ways in our system.
First, we can receive payment from the invoice
Navigate to
Sidebar > Sales > Invoice > Invoice list > Select button > Payment
Second, from the distribution module,
Navigate to:
Sidebar > Distribution > Sales Invoice > Action button > Delivery
Third, from the customer profile
Navigate to:
Sidebar > Contact > Customer > Customer list > Customer Profile > Receive Payment
Fourth, from the journal
Navigate to
Sidebar > Accounts > Journal > Add new Journal
Now collect the payment from the invoice:
Select the payment method
Quick cash availability
Multiple payment method availability
Attach relevant document
Finalize the payment
Journal for received payment:
Cash in test branch Dr 1505
Customer Test 1 (AR) Cr 1505
Aorabook automatically:
Clears receivable balance
Updates customer ledger
Reflects real cash position
Step 6: Partial Payments & Outstanding Balance
If a customer pays partially, Aorabook keeps the unpaid balance open.
Here, the customer due 358.50, and the deliveryman collects 258.50.
Customer profile:
Status shows partial paid in invoice
Outstanding amount is always visible.
Same logic applies to supplier partial payments
Here, supplier test 2 is due 525. I paid 325, now see the system reflection.
Supplier profile:
Due balance 200
Paid amount 325
This helps businesses manage collections and payments properly.
Step 7: Financial Statement Impact
Balance sheet:
Accounts Payable appears under Liabilities
Accounts Receivable appears under Assets
Accounts payable ledger report:
Accounts Receivable ledger report:
Trial balance:
Partner ledger report:
Supplier test: Balance 0
Supplier test 2: balance 200
Supplier test 3: balance 372
Customer test 1: balance 0
Customer test 2: balance 100
Partner summary reports:
Customer test 1:
Customer test 2:
Supplier Test:
Supplier test 2:
Supplier test 3:
Balance Sheet, cash flow, and ledgers update automatically—no extra posting required.
Aorabook ERP automatically tracks who you need to pay and who needs to pay you—so your cash flow stays under control at all times.
