Account receivable definitions
| Word backwards | tnuocca elbaviecer |
|---|---|
| Part of speech | The part of speech of the word "account receivable" is a noun. |
| Syllabic division | ac-count re-ceiv-able |
| Plural | The plural of the word "account receivable" is "accounts receivable." |
| Total letters | 17 |
| Vogais (5) | a,o,u,e,i |
| Consonants (7) | c,n,t,r,v,b,l |
Understanding Account Receivable
Account receivable is a crucial aspect of a company's financial health. It represents the money owed to a business by its customers for goods or services provided on credit. In simpler terms, it is the amount of money that customers owe a company for goods or services purchased on credit terms.
Managing Account Receivable
Effective management of account receivable is essential for the smooth functioning of a business. It involves monitoring and collecting payments from customers within the agreed-upon terms. This process ensures a steady cash flow and helps prevent financial issues.
Credit Terms
Setting clear credit terms is crucial in managing account receivable. It includes defining payment terms, credit limits, and consequences for late payments. Clear credit terms help in maintaining a healthy account receivable balance.
Collection Process
The collection process plays a significant role in managing account receivable effectively. It involves sending reminders to customers regarding their outstanding payments, following up on overdue invoices, and taking necessary actions to collect payments promptly.
Efficient Collection
An efficient collection process ensures that account receivable balances are kept in check. It helps in maintaining a positive cash flow, reducing bad debts, and improving the overall financial stability of the business.
Account receivable Examples
- The company tracks its account receivable regularly to ensure timely payments from customers.
- It is important to maintain a healthy account receivable turnover ratio for a business to run smoothly.
- The accountant reconciled the account receivable balance with the customer's records.
- The aging report showed that some account receivable were past due and needed collection efforts.
- Aging of account receivable can impact the company's cash flow and financial health.
- The finance department reviews the account receivable aging report monthly to identify any issues.
- The credit manager monitors the account receivable aging to assess credit risk for customers.
- The company offered a discount to customers who paid their account receivable early.
- The bookkeeper updated the account receivable ledger with the latest transactions.
- The collection team worked tirelessly to recover past due account receivable from delinquent customers.