Accounts receivable is the name of the account where increases and cuts related to the sale of concepts other than products or services are recorded. This account is made up of bills of exchange, credit titles and promissory notes in favor of the company.
Accounts receivable, therefore, grant the organization the right to demand that the subscribers of the credit instruments pay the documented debt. This is a future benefit credited by the account holder.
Among the accounts receivable, one can speak of accounts receivable from the customer (when he takes credit with the company) and accounts receivable from employees and officials (they record salary advances and other criteria). Another distinction between the accounts receivable is given by the time I said credit can be converted into cash (accounts receivable in the short term, accounts receivable long term, etc.).
In the latter case, it is interesting that we learn more about some nuance of this type of accounts receivable. Thus, for example, we could determine that the long-term are those that are identified by the fact that the availability they have is for more than one year. All this without forgetting that, in addition, at the time of filing, it is mandatory and necessary that it be done outside of what would be the set of current assets.
On the contrary, those previously mentioned and that are called short-term accounts receivable are those in which said availability is the one that occurs in a period of less than one year. It is also important to know that when the presentation process has to be carried out, it must be done within what would be the current assets related to the financial situation of the corresponding entity.
Accounts receivable are part of the overall balance of the organizations as part of their credit or Haber, because eventually they will become effective for the company.
In addition to everything that we have explained so far, it is important to know that the accounts receivable process is basically made up of two phases or fundamental pillars. On the one hand, there is what the billing would be, and on the other, the payments.
It is essential to be clear that these accounts receivable that concern us are important and require that the company have them perfectly noted and registered. For this reason, it is usual that, in many cases, audits are chosen to be able to verify this action, which will carry out tasks such as verifying what the identity of the bad debtors would be.
The granting of products or services on credit is one of the tools that companies have to keep current customers and attract new ones. Said credits are reflected in accounts receivable, even when they present different conditions and forms of payment.
By managing accounts receivable, a company can streamline credit collection and analyze the cost-benefit of the modality.