A business undergoes a lot of transactions every single working day so it becomes necessary to maintain a record of all transactions incurred during the day. As a good accounting practice, it is suggested that these records shall be reviewed at the end of the day. A record of cash transactions and credit transactions shall be segregated to maintain a clear understanding of Receivables. All cash transactions being payments ad receivables should be tallied with the amount of cash in hand while the credit transactions should be properly accounted for and followed on timely intervals. Bank records should be adequately reconciled and in case of any differences, the reason such mismatch shall be opened and disclosed. In case of debtors, standing in the accounts shall be conformed and their balances may be reconciled, a proper reminder for their amount due shall be given on a timely basis. While in case of creditors or payables outstanding their payment due shall be conformed, the amount due to them may be reconciled from both parties and in the case of time lag the reason for such lag shall be mentioned.
Receivable is a sum of payment which owed or due to a company by a client or employee against goods or services provided by company. Receivable is an outstanding payment and generally recorded in balance sheet as an asset of the company. It is an important factor in a company’s working capital. Receivables may differ from notes receivables. Receivables should receive in specific time mostly known as credit time. Late receiving of receivable may affect your company’s cash flow, therefore it is important to collect your owed payments in time in order to maintain business affairs effectively. Generally short term receivables are known as company’s current assets. Organizations and companies can sometimes use their receivables as collateral for borrowing money. If you are accountant, you should manage receivables in best way, managing receivable effectively helps ensure you receive money from sales in a specified time.
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