Cash collection

Cash collection

Cash collection is a function of Accounts receivable[1][2]. It is the recovery of cash from a business or individual with which you have issued an Invoice.

Unpaid invoices are considered outstanding.

Invoices are always issued with terms of payment[3]. These terms vary widely from 'Cash terms', meaning that the invoice is due immediately, to many forms of 'Credit terms'. (for example 30 days from date of invoice[4])

Invoices which remain unpaid for periods longer than their 'terms' indicate are considered overdue

It is the aim of the Cash collection function of a business to collect Monies for all outstanding invoices before they become overdue and to mediate payment arrangements to ensure that invoiced debts do not become doubtful or bad.

References

  1. ^ http://www.gov.ns.ca/treasuryboard/manuals/PDF/200/21101-03.pdf
  2. ^ http://www.colorado.gov/dpa/dfp/sco/acct_rec/ar_rule.pdf
  3. ^ http://www.businesslink.gov.uk/bdotg/action/detail?r.s=sc&r.l1=1073858790&r.lc=en&r.l3=1073965654&r.l2=1084596842&r.i=1073791760&type=RESOURCES&itemId=1073791761&r.t=RESOURCES
  4. ^ http://www.businesslink.gov.uk/bdotg/action/detail?r.s=sc&r.l1=1073858790&r.lc=en&r.l3=1080387371&r.l2=1084596842&r.i=1080400524&type=RESOURCES&itemId=1080395671&r.t=RESOURCES

See also


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