Related Literature of Accounts Receivable
Chapter II
Review of Related Literature and Related Studies
Related Literature
Accounts receivable describes the amount of cash, goods, or services owed to a business by a client or customer. The manner, in which the collection of outstanding bills is handled, especially in a small business, can be a pivotal factor in determining a company's profitability. Getting the sale is the first step of the cash flow process, but all the sales in the world are of little use if monetary compensation is not forthcoming.
Moreover, when a business has trouble collecting what it is owed, it also often has trouble paying off the bills (accounts payable) it owes to others.
Making collections, just as there's an art of the sale, there is an art of the collection. In an ideal world, a company's accounts receivable collections would coincide with the firm's accounts payable schedule. But there are many outside factors working against timely payments, some of which are beyond the control of even the most efficient of collection systems. Seasonal demands, vendor shortages, stock market fluctuations, and other economic indicators can all contribute to a client's inability to pay bills in a timely fashion. Recognizing those factors, and learning to make business plans with them in mind, can make a big difference in establishing a solid accounts receivable system for your business.
Accounts receivable describes the amount of cash, goods, or services owed to a business by a client or customer. The manner, in which the collection of outstanding bills is handled, especially in a small business, can be a pivotal factor in determining a company's profitability. Getting the sale is the first step of the cash flow process, but all the sales in the world are of little use if monetary compensation is not forthcoming.
Moreover, when a business has trouble collecting what it is owed, it also often has trouble paying off the bills (accounts payable) it owes to others.
Making
Review of Related Literature and Related Studies
Related Literature
Accounts receivable describes the amount of cash, goods, or services owed to a business by a client or customer. The manner, in which the collection of outstanding bills is handled, especially in a small business, can be a pivotal factor in determining a company's profitability. Getting the sale is the first step of the cash flow process, but all the sales in the world are of little use if monetary compensation is not forthcoming.
Moreover, when a business has trouble collecting what it is owed, it also often has trouble paying off the bills (accounts payable) it owes to others.
Making collections, just as there's an art of the sale, there is an art of the collection. In an ideal world, a company's accounts receivable collections would coincide with the firm's accounts payable schedule. But there are many outside factors working against timely payments, some of which are beyond the control of even the most efficient of collection systems. Seasonal demands, vendor shortages, stock market fluctuations, and other economic indicators can all contribute to a client's inability to pay bills in a timely fashion. Recognizing those factors, and learning to make business plans with them in mind, can make a big difference in establishing a solid accounts receivable system for your business.
Accounts receivable describes the amount of cash, goods, or services owed to a business by a client or customer. The manner, in which the collection of outstanding bills is handled, especially in a small business, can be a pivotal factor in determining a company's profitability. Getting the sale is the first step of the cash flow process, but all the sales in the world are of little use if monetary compensation is not forthcoming.
Moreover, when a business has trouble collecting what it is owed, it also often has trouble paying off the bills (accounts payable) it owes to others.
Making