Due from Account: What Australian Businesses Need to Know in 2026

A due from account—sometimes called an account receivable—is an asset account on your balance sheet. It records money that is owed to your business by other parties, such as customers, suppliers, or related companies. When you provide goods or services and issue an invoice, the amount you’re owed is recorded in your due from account until it’s paid.

Example:

• If you invoice a client $5,000 for consulting services, that $5,000 sits in your due from account until the client pays.

Common types of due from accounts include:

• Trade receivables (amounts owed by customers)
• Intercompany receivables (amounts owed by related entities)
• Advances to employees or suppliers

These accounts are not just accounting entries—they directly affect your business’s ability to pay bills, invest in growth, and demonstrate financial health to lenders or investors.

Several factors in 2026 have made due from accounts a focal point for Australian businesses:

• Cash Flow Pressures: With interest rates remaining elevated, managing cash flow is a top priority. Money tied up in unpaid invoices can limit your ability to cover expenses or seize new opportunities.

• Regulatory Scrutiny: There is increased attention from regulators on how businesses report receivables, especially for tax and GST compliance. Accurate reporting is essential to avoid errors and potential penalties.

• Credit Risk Management: Accounting standards require businesses to assess and disclose the risk of not being paid. This means you need to monitor overdue accounts and estimate potential losses more proactively than in the past.

If due from accounts are not managed well, businesses can face liquidity issues, compliance risks, and even damage to their reputation with lenders or investors.

Good management of due from accounts helps maintain healthy cash flow and reduces the risk of bad debts. Here are practical steps for Australian businesses in 2026:

1. Automate Invoicing and Reminders

Using cloud-based accounting software can streamline your invoicing process. Many platforms allow you to set up automatic reminders for overdue payments, reducing the need for manual follow-up and helping you get paid faster.

2. Regularly Review and Reconcile Accounts

Set aside time each month to review your due from accounts. Look for overdue invoices, follow up with customers, and identify any amounts that may need to be written off as bad debts. Regular reconciliation ensures your records are accurate and up to date.

3. Establish Clear Credit Policies

Before extending credit to customers, set clear terms and conditions. Consider performing credit checks for new clients and requiring deposits or upfront payments where appropriate. Having a written credit policy helps manage expectations and reduces the risk of late payments.

4. Disclose Receivables Clearly

When preparing your financial statements, break down your receivables by how long they have been outstanding (for example: current, 30 days, 60+ days overdue). This transparency is important for auditors, lenders, and anyone reviewing your business’s financial health.

5. Consider Financing Options

Some businesses use invoice financing or trade credit insurance to access funds tied up in receivables. These solutions can help improve cash flow, but it’s important to understand the costs and terms before proceeding.

For more on managing business finances, see our finance section.

Managing due from accounts isn’t just about chasing payments. Here are some common issues and tips to stay compliant:

Don’t Ignore Small Balances

Even small overdue amounts can add up over time. Regularly review your accounts and follow up on all outstanding debts, regardless of size. Writing off old, uncollectible amounts keeps your books accurate.

Understand GST Treatment

Make sure you report GST on unpaid invoices according to your accounting method (cash or accrual). Errors in GST reporting can attract attention from the ATO, so double-check your processes.

Manage Intercompany Receivables Carefully

If your business operates multiple entities, document all intercompany transactions and reconcile due from and due to accounts regularly. This helps avoid confusion and potential audit issues.

Estimate and Disclose Expected Credit Losses

Accounting standards require businesses to estimate potential credit losses, even for accounts that aren’t yet overdue. Review your receivables regularly and make appropriate provisions in your accounts.

For more guidance on financial reporting, visit our mortgage brokers page.

Due from accounts are a vital part of your business’s financial picture. In 2026, with ongoing economic and regulatory pressures, keeping a close eye on your receivables is more important than ever. By automating processes, setting clear policies, and staying on top of compliance, you can protect your cash flow and position your business for growth.

What is a due from account in simple terms? A due from account records money owed to your business by customers or other parties. It’s an asset on your balance sheet until the amount is paid.

Why are due from accounts important for cash flow? They represent funds your business expects to receive. Managing them well ensures you have enough cash to cover expenses and invest in growth.

How often should I review my due from accounts? It’s a good idea to review them at least monthly, following up on overdue invoices and reconciling your records.

Do I need to report GST on unpaid invoices? Yes, but how you report depends on whether you use cash or accrual accounting. Check your accounting method to ensure you comply with ATO requirements.