Knowing how good you manage your accounts receivable is critical in managing the whole company’s financial. It could be meant: how good you pay your bills...
A product financing arrangement is a transaction in which an entity sells and agrees to repurchase inventory with the repurchase price equal to the original sales...
Thinking of accounts receivable: credit sales converted into accounts receivable (A/R), and then wash them when the corresponding cash is collected. That is what I learnt...
The regulators do not permit a business organized as a C-corporation (in the United States) to use cash basis accounting. Instead, these companies must use accrual...
Short-term financing may be used to meet seasonal and temporary fluctuations in a company’s funds position as well as to meet permanent needs of the business....
Many treasury departments find that their performance falls outside of a company’s normal set of performance metrics. The standard of performance is earnings before interest, taxes,...
Accounts receivable financing has several advantages, including avoiding the need for long-term financing and obtaining a recurring cash flow base. Accounts receivable financing has the drawback...
Confirmation of accounts receivable, including a financial institution’s loans, is a generally accepted auditing procedure. It is therefore presumed that the auditor will request the confirmation...
The collection of overdue accounts receivable can be a messy and prolonged affair that results in irate customers and poor collection results. However, when properly organized,...
Accounts receivable management directly affects company’s profitability and cash flow. For example, too much money tied up in accounts receivable would be a drag on earnings....
Accounts receivable represents the amounts due from customers for services rendered or goods sold in the past. Receivables from customers also are referred to as “trade...
Your business sells products both at retail to consumers and to other businesses. You extend short-term credit to your business customers. Over the years, you have...
The most inexplicable event for a senior-level manager is to see a profit at the bottom of the income statement, and yet field a request from...
ACCOUNTING EQUATION – double entry bookkeeping where there is an identity of debit and credit elements of a transaction. For each transaction, the total debits equal...
The accountant is usually in charge of granting credit to customers, as well as collecting funds from them. These basic responsibilities give rise to a number...