Product Overview

Summary: This Accounts Receivable and Payable Standard Operating Procedure provides a clear, end-to-end framework for managing customer invoices, supplier payments and cash flow in line with Australian business and tax requirements. It standardises daily finance tasks, reduces errors, and supports accurate, audit-ready records so your business can make confident decisions and meet its obligations on time, every time.

The Accounts Receivable and Payable Standard Operating Procedure is designed to bring structure, consistency and control to one of the most critical parts of your business: the flow of money in and out. In many Australian organisations, receivables and payables are spread across emails, spreadsheets and ad-hoc processes, creating delays, missed invoices, duplicate payments and compliance risks. This SOP consolidates best-practice financial workflows into a single, easy-to-follow document that guides staff through every step, from raising customer invoices and managing credit terms to verifying supplier bills and scheduling payments.

Developed for the Australian regulatory environment, the procedure helps your team align with GST and BAS requirements, maintain accurate records for audit, and support strong internal controls against fraud and error. It defines clear responsibilities between finance staff and managers, sets approval thresholds, and integrates with common accounting software workflows (such as Xero, MYOB or QuickBooks). By implementing this SOP, your business can improve cash flow visibility, strengthen supplier and customer relationships, and ensure that finance processes continue smoothly even when key staff are away.

Whether you are formalising processes for the first time or tightening existing controls, this SOP provides a practical, ready-to-use template that can be tailored to your chart of accounts, payment cycles and industry-specific requirements. It is written in plain language for busy teams, while still providing the level of detail expected by auditors, external accountants and senior management.

Key Benefits

• Streamline the end-to-end handling of customer invoices and supplier bills, reducing rework and delays.
• Improve cash flow forecasting and decision-making with consistent, timely recording of receivables and payables.
• Ensure alignment with Australian GST and BAS reporting requirements through standardised documentation and approvals.
• Reduce the risk of fraud, duplicate payments and unauthorised write-offs via clear segregation of duties and approval limits.
• Support rapid onboarding and cross-training of finance staff with a documented, repeatable way of working.

Who is this for?

• Finance Managers
• Accounts Payable Officers
• Accounts Receivable Officers
• Bookkeepers
• Small Business Owners
• Practice Managers
• Office Managers
• Financial Controllers
• Payroll and Finance Administrators
• Business Managers in Not-for-Profits

Included Sections

• 1.0 Purpose and Scope
• 2.0 Definitions and Key Terms
• 3.0 Roles and Responsibilities (Finance, Management, External Accountant)
• 4.0 Overview of Accounts Receivable and Payable Workflow
• 5.0 Customer Onboarding and Credit Approval Process
• 6.0 Raising and Issuing Customer Invoices
• 7.0 Recording Receipts, Allocations and Customer Reconciliations
• 8.0 Overdue Accounts, Reminders and Debt Collection Escalation
• 9.0 Supplier Onboarding, Verification and Credit Terms
• 10.0 Processing Supplier Invoices and Credit Notes
• 11.0 Three-Way Matching (Purchase Order, Delivery, Invoice) and Approvals
• 12.0 Payment Run Preparation, Authorisation and Execution
• 13.0 Handling Disputes, Adjustments, Write-offs and Refunds
• 14.0 GST Treatment, Coding and BAS Preparation Interface
• 15.0 Reconciliation of Trade Debtors and Creditors to the General Ledger
• 16.0 Use of Accounting Software (e.g. Xero, MYOB, QuickBooks) – System Controls and Audit Trail
• 17.0 Data Security, Privacy and Record Retention Requirements
• 18.0 Internal Controls, Segregation of Duties and Fraud Prevention Measures
• 19.0 Performance Metrics and Reporting (Aging Reports, Days Sales Outstanding, Creditor Days)
• 20.0 Training, Review and Continuous Improvement of the Procedure

Legislation & References

• A New Tax System (Goods and Services Tax) Act 1999 (Cth)
• Corporations Act 2001 (Cth) – financial records and reporting obligations
• Australian Accounting Standards (AASB) – particularly AASB 101 Presentation of Financial Statements and AASB 107 Statement of Cash Flows
• Taxation Administration Act 1953 (Cth) – record-keeping and reporting requirements
• Privacy Act 1988 (Cth) – Australian Privacy Principles (APPs) for handling customer and supplier information