| Accounts receivable is one of a sequence of | | | | year. To documentation a journal entry for a sale |
| financial accounting transactions dealing with the | | | | on account, one must debit a receivable and |
| billing of a customer for goods and services he | | | | credit a revenue account. When the customer |
| she has considered. In most business entities this | | | | pays off their accounts, one debits cash and |
| is usually done by generating a statement and | | | | credits the receivable in the journal entry. The |
| mailing or automatically delivering it to the | | | | ending balance on the trial balance sheet for |
| customer, who in turn must pay it within a | | | | accounts receivable is always debit. |
| recognized time-frame called "creditor expense | | | | In today's credit environment outsourcing |
| terms." | | | | accounts receivable management has become an |
| Account receivable means money which is billed | | | | important business tool. How companies handle |
| to a company by a customer for products and | | | | accounts receivable differs, but accounts |
| services provided on credit. This is treated as an | | | | receivable processes commonly allow you do |
| existing asset on a balance sheet. A detailed sale | | | | three things: |
| is normally only treated as an account receivable | | | | • Record your daily sales and receipts. |
| after the customer is sent an invoice. | | | | • Generate customer invoices and monthly |
| While booking a receivable is proficient by a plain | | | | statements. |
| financial accounting transaction, the procedure of | | | | • Track customers' current and past-due |
| maintaining and collecting payments on the | | | | balances. |
| accounts receivable subsidiary account balances | | | | Related accounting issues include recognizing |
| can be a full time proposal. Depending on the | | | | accounts receivable, valuing accounts receivable, |
| industry in practice, accounts receivable payments | | | | and disposing of accounts receivable. Accounts |
| can be acknowledged up to 10 - 15 days | | | | receivable departments use the sales ledger. |
| subsequent to the due date has been reached. | | | | Other types of accounting transactions include |
| Account receivables are classified as existing | | | | accounts payable, payroll, and trial balance. |
| assets assuming that they are due within one | | | | |