One way of reducing operating cash requirements is by speeding up accelerating collection of receivables . This may be effected byshortening credit terms and offering special discount to customer who settle their accounts within a specified period.
Acceleration in the collection of receivables will tend to cause the accounts receivable turnover to increase. Many companies use collection agencies to help them with this process.
No
increase
Debit cash / bank 1200Credit accounts receivable 1200If it is a collection from customer's account, thenDEBIT: Cash 1200CREDIT: Accounts Receivable 1200Collection from customer's account
yes the sales will drive the main steam in the account receivable because when the sales happen the account receivable collection attampt will start
Acceleration in the collection of receivables will tend to cause the accounts receivable turnover to increase. Many companies use collection agencies to help them with this process.
No
increase
Debit cash / bank 1200Credit accounts receivable 1200If it is a collection from customer's account, thenDEBIT: Cash 1200CREDIT: Accounts Receivable 1200Collection from customer's account
yes the sales will drive the main steam in the account receivable because when the sales happen the account receivable collection attampt will start
Avg Collection Period increases.
A collection agency: Accounts Receivable Technologies
NO
writtenoff A/C Dr. To Accounts Receivable Cr. (or) (To sundry Debtors A/c ) Cr.
If you're speaking $600 money received for an account receivable, the entry is Debit to Cash for $600 Credit to the appropriate AR for $600
kjihihiiuhij
Oh, dude, calculating the collection period is like measuring how long it takes for a company to collect its accounts receivable. You just divide the average accounts receivable by the net credit sales and boom, you've got your collection period. It's not rocket science, just basic math with a fancy name.