What are accounts receivable?

We speak of accounts receivable when a company has rights pending collection over third parties, whether physical or legal, at a certain date. These pending collections usually occur when loans are made that a company grants to its clients.

Accounts receivable can be classified according to their origin into accounts receivable from clients, affiliated companies, employees and other debtors, separating those collections that come from sales and services from the rest of the origins. It can also be classified according to availability: immediate or short-term and long-term.

The goal of using accounts receivable is to stimulate sales and win new customers. It is also often used as a tool for marketingto protect market position.

This type of account must be indicated in the asset of a company, as it is money that is waiting to be taken.

It is important to manage these accounts well, since it is the asset with the highest availability, after cash on hand, because it does not have to go through the manufacturing, storage, transfer and placement processes in the clients.

Management of accounts receivable

The management of accounts receivable has a double function. On the one hand, it serves to carry out a well-detailed and analyzed billing, thus avoiding payment delays and delinquencies. On the other hand, if a commercial vision is applied, the good management of accounts receivable, which are based on credit, can also allow generating income in the future.

A good accounts receivable management service should consist of an analysis, verification, customer follow-up, a pre-expiration, a study of the reasons and a solution search device. For this reason, communication with customers is essential, both to avoid delinquencies and to establish a good business relationship that generates benefits in the future.

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