Due from Account: Essential Guide for Australian Businesses 2025

In the world of Australian business accounting, the term ‘due from account’ might not make headlines, but it plays a crucial role in tracking who owes your business money. Whether you’re a small business owner, bookkeeper, or finance manager, understanding how due from accounts work in 2025 is vital for maintaining healthy cash flow and staying compliant with evolving accounting standards.

What Is a Due from Account?

A ‘due from account’ (also called an account receivable) is an asset account on your balance sheet that records money owed to your business by other entities—typically customers, suppliers, or even affiliated companies. This is not just an abstract accounting concept: it directly affects your day-to-day operations, ability to invest, and how lenders view your financial health.

• Example: If your business provides consulting services to a client and invoices $5,000, that amount is recorded as a due from account until the client pays.

• Typical entries: Trade receivables, intercompany receivables, or advances to staff.

In 2025, Australian businesses are seeing more scrutiny on receivables due to tighter credit conditions and updated financial reporting obligations under AASB 9 (the Australian equivalent of IFRS 9).

Why Due from Accounts Matter in 2025

This year, several factors have put the spotlight back on receivables:

• Interest Rate Volatility: With RBA’s cash rate holding above 4% and small business lending rates at decade highs, cash flow management is critical.

• Stricter Reporting: The ATO has increased its focus on accurate reporting of trade receivables for GST and tax compliance.

• Credit Risk Management: Under the updated AASB 9, businesses must recognise potential credit losses earlier, requiring a more proactive approach to overdue accounts.

Failing to manage due from accounts properly can result in poor liquidity, missed investment opportunities, or even compliance penalties. For example, a Melbourne-based importer recently faced an ATO review after inconsistencies were found between their BAS statements and reported receivables.

How to Manage Due from Accounts Effectively

With these pressures in mind, here are practical steps for Aussie businesses to stay ahead in 2025:

• Automate Invoicing: Cloud accounting platforms like Xero and MYOB now offer AI-driven reminders and payment tracking, reducing manual follow-up.

• Regular Reconciliation: Schedule monthly reviews of your due from accounts to flag overdue invoices and identify potential bad debts early.

• Implement Credit Policies: Set clear credit terms, perform customer credit checks, and consider upfront deposits for new clients.

• Disclose Clearly: Ensure your financial statements break down receivables by age (current, 30 days, 60+ days) to satisfy auditors and potential lenders.

In 2025, the rise of embedded finance platforms also means more SMEs can access invoice financing or trade credit insurance, helping to turn receivables into working capital. For example, Sydney-based tech startup FlowPay launched a service allowing businesses to unlock up to 90% of their receivables within 24 hours—freeing up cash for payroll or inventory purchases.

Common Pitfalls and 2025 Compliance Tips

• Ignoring Small Balances: Don’t let minor overdue amounts accumulate. Write off or chase up old debts to keep your books clean.

• GST Treatment: Ensure you report GST on unpaid invoices in line with your accounting method (cash vs accrual), as ATO audits in 2025 are targeting errors here.

• Intercompany Receivables: If you operate multiple entities, document all transactions and reconcile due from/due to accounts to avoid audit red flags.

• Provision for Doubtful Debts: Under AASB 9, estimate and disclose expected credit losses—even on not-yet-overdue accounts.

Staying on top of these areas doesn’t just keep you compliant—it can also improve your business’s valuation and attractiveness to lenders or investors.

The Bottom Line

Due from accounts are more than just a line on your balance sheet. In 2025’s high-stakes business environment, they’re a key driver of cash flow, compliance, and credibility. By sharpening your receivables management, leveraging new fintech solutions, and adhering to the latest reporting standards, you’ll keep your business resilient and ready for growth.