Heading towards the end of each month and when quarter-end is nearing, many creditors scramble to get their accounts receivable up to date. In fact, most companies wait until an invoice is past due before taking any action at all. But why not be proactive? Show
The following strategies can be used to get accounts paid before they are due and speed up the collection process.
By taking some steps to improve your billing and collections process, you can go a long way toward getting your sales finalized sooner and more efficiently. Going proactive on this is like money in the bank. Which method of accounting for uncollectible accounts receivable uses an estimate based on a percentage of sales?The percentage-of-receivables method estimates uncollectible accounts by determining the estimated net realizable value of accounts receivable, so many accountants refer to this as the balance-sheet method.
How are compensating balance requirements normally disclosed?Compensating balances that are maintained under an agreement to assure future credit availability should be disclosed in the notes to the financial statements along with the amount and terms of such agreement.
When companies sell their receivables to other companies the transaction is called factoring?When companies sell their receivables to other companies, the transaction is called factoring. A disadvantage of factoring is that the company selling its receivables immediately receives cash. GAAP requires companies with a large amount of receivables to use the allowance method.
Which of the following receivables would not be classified as an other receivable?Which of the following receivables would not be classified as an "other receivable"? trade receivables.
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