Types of Accounts Receivable
Accounts receivable can be divided according to several criteria.
By maturity – long-term and short-term. Long-term – with a maturity of more than a year. Short-term – debt repaid within a year from the date of conclusion of the contract. To illustrate, if payment for shipped materials is due in two months, for illustrate, a loan for an employee.
By maturities of obligations – For normal or overdue. Urgent or normal – when it is not yet time to pay off the debt. For example, a company has delivered goods to a customer, but he can pay within ten days under the contract. A week later, his debt is still considered normal. Arrears appear when the terms specified in the agreement have expired. For example, the same buyer did not pay for the goods even after a month.
On the Grounds of Occurrence – Depending on who Owes the Company?
- Buyers – for example, undersupply contracts.
- Suppliers – from which they did not receive the goods, although they transferred the prepayment.
- The state — for example, when the company overpaid in taxes.
- Employees – for example, if the company gave them a loan.
- Founders – if, for illustrate, they have not paid their share in the company’s authorized capital.
Doubtful is not secured by a pledge, guarantee, or bank guarantee. Desperate – with an expired statute of limitations. The debt is also considered hopeless if the debtor company is liquidated or the bailiffs fail to recover the money. And when the debtor was expelled from the
Here are some Procedures you can Utilize to Manage Receivables
Inventory of debts – this helps to detect doubtful and uncollectible receivables. The company can conduct a list of debts on its initiative. Still, there are cases when it must be carried out without fail – for example, if theft is discovered at the enterprise or the owners decide to liquidate the organization. In addition, an inventory is carried out before issuing the annual report. Based on its results, a particular act draws up a list of settlements with debtors, buyers, and suppliers. The accounting department draws up a specific certificate.
Determine due dates for debts and remind counterparties of them. In this case, the accounting department checks the debt with the dates specified in the contracts, checks shipments, and sends letters to partners with a reminder of the payment date.
Estimate the labor costs for debt collection. It is possible that the price of collection work is not comparable to the amount of the debt – the payment of lawyers and legal costs will be more than the money that you can return. Therefore, you can set a minimum for it is worth organizing collection work and controlling only the debt above this amount.
Check the solvency of the debtor. Perhaps the stage of bankruptcy is already underway, and you must urgently do everything to get into the register of creditors. In the file cabinet of arbitration cases, you can see if a counterparty’s bankruptcy claim has been filed. See if it is already in any stage of bankruptcy. You can check whether the debtor is in the process of liquidation or reorganization in the Transparent Business service of the Federal Tax Service.
Main Tasks of Debt Management
For partners to pay on time, the company’s employees check debtors even before concluding a deal. For example, prescribe penalties for late payment.
In addition, the company must control the number of overdue receivables and make claims against unscrupulous customers. Accounts receivable management also implies the collection of debts from persistent defaulters through the courts.
Collecting and providing the debt servicing of delinquent customers for the multiple products of the bank while ensuring the collection of payments from the clients who took the loan on time. Ensuring positive customer servicing experience in the collection process and giving customers high-standard quality services.
Participants in a Debt Management
Debt problems are not limited to company financiers. Other departments are also involved in the management of receivables. For example, security officers check contractors, sales managers, and accountants monitor non-payments, and lawyers draw up claims and collect debts in court. Its management organizes the process, controls it, and motivates employees.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.