Home » The Basics of Accounts Receivable Financing – 328 Words

The Basics of Accounts Receivable Financing – 328 Words

If you add up your individual customer Sales Invoices, this will provide you with a total sum of what your customers owe you. This dollar amount is your total Accounts Receivable. Look at this figure as the dead opposite of your Accounts Payable, which is the total amount you owe to your vendors.

Accounts Receivable in More Detail

An official record of an account is a Sales Invoice you have sent to a customer. This Sales Invoice represents a legally enforceable claim for payment for goods or services you have delivered to your customer. A Sales Invoice or Accounts Receivable record will specify “terms” including the time frame in which payment is required to be made.

Sales Order

A Sales Order is produced when your customer orders your product or service and contains the order details needed for both your company’s and your customer’s records. Once the product or service has been shipped or delivered, an Account Receivable record is created from the Sales Order.

Cash Receipt

A Cash Receipt records the payment (or partial payment) of a Sales Invoice by a customer. A Cash Receipt is a separate accounting item until it is applied to the outstanding amount of the customer’s Sales Invoice (the customer’s Account Receivable). There may be several Cash Receipts to a single Account Receivable.

Your Total Accounts Receivable is an Asset

Your accountant or accounting system will produce a Balance Sheet on which your total Accounts Receivable will be listed as an asset. Payments made by your customers will be applied to your total Accounts Receivable to reduce the outstanding amount.

Accounts Receivable Financing

Because your Accounts Receivable is an asset, you can use it as the basis for obtaining funding in order to grow your company or help you out with cash flow problems. ………………………… is a specialist in accounts receivable financing and provides funding solutions to a diverse array of businesses. Please contact us to learn how we can assist your company.

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