Before going on a rant about accounts receivable, let's take a moment to define it. It has been defined as the money due from all customers for merchandise or services delivered on credit. The total figure would be shown on the balance sheet as an asset.
Your business's accounts receivable are an important part of calculating your profitability, and provide the clearest indicator of the business's income. If you are a business owner dealing with a negative receivables, then decisions must be made regarding how to increase the assets or reduce the liabilities.
With not forgetting, accounts receivable are the livelihood of a business's cash flow. Business owners must also keep track of them to have documentation supporting proof of income tax time. A critical aspect of cash management in a small business is collecting accounts receivable as quickly as possible. If you decide to offer credit, then you will need to establish and enforce credit policies. We have identified 6 tips every business owner should consider when trying to keep cash inflows and outflows moving smoothly.
As a result of your business incorporating these tips, you will have cash flow to pay for your employees and vendors.
Developing business policies and procedures are key elements to delivering a consistent and straightforward about your businesses expectations. Avoid the headaches and get started with policy changes that will protect your business cashflow. You are a business owner in control - let your policies and procedures reflect it. It's never too late to get started.
"It's failure that gives you the proper perspective on success." - Ellen DeGeneres
Hello, I'm Terra the Founder and Marketing Director of Fontenot & Associates Solutions. Thank you for joining my Accounting world. Our blog's purpose is to teach with the determination of closing industry and accounting process gaps that knowingly exist with our uniquely designed detailed procedures and trainings.
My mission is to offer the best accounting results for all companies seeking to close their process gaps with actual solutions. With my Bachelors and Masters Degree in Accounting, I strive for continuous development and professional growth in this profession. My professional career has been in the Oil & Gas industry for nearly the past 10 years but my business focus is to support and train accounting professionals in all industries.