Accounts receivable represent sales that have not yet been collected as cash. You sell your merchandise or services in exchange for a customer's promise to pay you at a certain time in the future. If ... |
The average collection period measures the length of time it takes to convert your average sales into cash. This measurement defines the relationship between |
The average collection period can be used to determine the effect of different collection periods on your business's cash flow. This is best illustrated by ... |
The accounts receivable to sales ratio looks at your investment in accounts receivable in relation to your monthly sales amount. The accounts receivable to ... |
The accounts receivable aging schedule is a listing of the customers making up your total accounts receivable balance. Most businesses prepare an accounts ... |
The accounts receivable aging schedule is a useful tool for analyzing the makeup of your accounts receivable balance. Analyzing the schedule allows you to ... |
Credit terms are the time limits you set for your customers' promise to pay for their merchandise or services received. When customers purchase your merchandise or services, you expect them to pay ... |
The credit terms of your business should be designed to improve your cash flow. Some businesses allow customers to take a trade discount off the original ... |
The primary disadvantage of offering trade discounts is the cost to your bottom-line profits associated with the loss of revenues. The following example ... |
A credit policy is the blueprint used by a business in making its decision to extend credit to a customer. The primary goal of a credit policy is to avoid extending credit to customers who are unable ... |
