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Receivables PDF

Accounts receivable represents money owed by customers for goods or services delivered but not yet paid, classified as a current asset. It is crucial for reflecting sales on credit and managing cash flow. Effective management includes timely invoicing, following up on overdue payments, and accounting for potential bad debts.

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7 views1 page

Receivables PDF

Accounts receivable represents money owed by customers for goods or services delivered but not yet paid, classified as a current asset. It is crucial for reflecting sales on credit and managing cash flow. Effective management includes timely invoicing, following up on overdue payments, and accounting for potential bad debts.

Uploaded by

France shailyn Cos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Receivables

1. What is Accounts Receivable?

●​ Accounts receivable refers to the money owed by customers for goods or services
delivered but not yet paid for.​

●​ It is classified as a current asset on the balance sheet.​

2. Importance of Accounts Receivable

●​ It reflects the company’s sales on credit and indicates how much cash is expected to be
collected in the future.​

●​ Managing accounts receivable helps with maintaining cash flow and liquidity.​

3. How to Manage Accounts Receivable

●​ Invoice Customers: Send invoices promptly after delivering goods or services.​

●​ Follow Up: Send reminders for overdue payments.​

●​ Allowances for Doubtful Accounts: Estimate and account for bad debts to avoid
overstating receivables.​

4. Key Reminders:

●​ A large amount of receivables can indicate potential cash flow problems.​

●​ Always monitor and evaluate the aging of receivables (how long accounts have been
outstanding).

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