Business
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Accounts Receivable
Accounts receivable is any money your customers owe you for products or services they purchased from you in the past.
If you are in the business to sell your product or service to other businesses, cash sales are infrequent. You can collect on delivery (C.O.D.), but most commonly you will send your invoice to the customer or you will include your invoice with delivery of your product or service, and you will wait for your cheque or some other form of payment. This money is typically collected after a few weeks (most businesses require invoices to be paid in about 30 days), and is recorded as an asset on your company's balance sheet.
Your goal is to collect all the money owing to you, because if you don't collect, you've not only lost your profit, you're in same time stuck with the cost of producing your product or providing your service.
Manage your receivables well, because they represent a cost. Establish a workable and realistic credit policy, check out your potential customers, monitor your receivables carefully and take action if payment fails to arrive.
Accounts Receivable Process Improvement Tips:
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