Collection concept

En economía When we talk about collections, we are talking about that economic transaction that involves the payment of a debt. For example, companies charge their workers every month to send them their payroll corresponding to your job.

Definition of collection

From what has been said, the concept of collection refers to the monetary amount that a person receives for the payment of a debt. In this approach to the definition of a charge, we cannot forget that a charge will be settled when the provision of a service has been carried out, such as the exercise of an activity or, for example, the sale of a product, good or service. .

Normally, the person in charge of making a payment is the person in charge of keeping the treasury of a company. A separate question is how the payment can be made, what we do know is that the physical form of a payment is a bill or a fertilizer among others.

Is an income the same as a collection?

It is a frequent doubt not to know how to differentiate a collection from an income, because no, both concepts are not the same even though they do keep a particular similarity and context. To begin with, the charges are recorded in the situation balance, so they are always considered together with the rest of the money produced in a box. Meanwhile, a entry it is recorded within the income statement, so within the balance sheet, we will always find it with equity.

At the moment in which these two concepts are not differentiated as they should, we will have problems to clarify and determine the accounting of a company. Furthermore, a charge will always be conceived as the entry of a monetary amount. However, there is a simultaneous situation between a collection and an income and it is one in which a collection is made in cash.

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