Cash collection
Accounts receivable
Accounts receivable, abbreviated as AR or A/R, are legally enforceable claims for payment held by a business for goods supplied or services rendered that customers have ordered but not paid for. These are generally in the form of invoices raised ...
. It is the recovery of cash from a business or individual with which you have issued an
Invoice
An invoice, bill or tab is a commercial document issued by a seller to a buyer relating to a sale transaction and indicating the products, quantities, and agreed-upon prices for products or services the seller had provided the buyer.
Payment ...
.
Unpaid invoices are considered outstanding.
Invoices are always issued with terms of payment. These terms vary widely from '
Cash
In economics, cash is money in the physical form of currency, such as banknotes and coins.
In bookkeeping and financial accounting, cash is current assets comprising currency or currency equivalents that can be accessed immediately or near-im ...
terms', , to many forms of '
Credit
Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt) ...
terms' (for example ''30 days from date of invoice''
).
Invoices which remain unpaid for periods longer than their 'terms' indicate are considered overdue.
It is the aim of the Cash collection function of a business to collect
Monies for all outstanding invoices before they become overdue and to mediate payment arrangements to ensure that invoiced debts do not become
doubtful
Doubt is a mental state in which the mind remains suspended between two or more contradictory propositions, unable to be certain of any of them.
Doubt on an emotional level is indecision between belief and disbelief. It may involve uncertainty ...
or
bad.
See also
*
Invoice
An invoice, bill or tab is a commercial document issued by a seller to a buyer relating to a sale transaction and indicating the products, quantities, and agreed-upon prices for products or services the seller had provided the buyer.
Payment ...
*
Accounts receivable
Accounts receivable, abbreviated as AR or A/R, are legally enforceable claims for payment held by a business for goods supplied or services rendered that customers have ordered but not paid for. These are generally in the form of invoices raised ...
References
External links
{{DEFAULTSORT:Cash Collection
Accounts receivable
Cash
Working capital management