Not all businesses are run in a conventional way. Nowadays, as the competition in business becomes more competitive, every business owner, both small and large scaled, competes to win the competition and at the same time attract new customers. Maintaining their business’s life is their main concern.
One of the efforts to win the competition is by giving a moratorium for sales transactions to customers. It is generally known as sales transactions credit that will cause receivables. On the purchasing side is called a purchase transaction credit and will incur debt. Accounts receivable are the company’s money but it still in the customer, due to the sales transaction on credit. On the other hand, receivable is supplier’s money that has not been paid by the company. The value of receivables and payables are stated in the balance sheet in the financial statement. It is stated more detail in the Payable Receivables Report, such as payable / receivables cards, payable / accounts receivable mutation, accounts payable / receivables per salesman, etc.
The receivable means the customer has not paid to the company, therefore the company could not buy supplies, make any payments and others. Managing receivable is necessary because it is part of the company’s working capital. Receivable collection must be done orderly in order to maintain the business activity. Easy-to-read notes to ensure this billing schedule is definitely needed. These notes are commonly called reminder notes or reminders. The remainder consists the information of due date, customer name, invoice date and also the amount of the receivable. Without this reminder, the finance staff will have trouble to trace the receivable and due date. Surely this will cause other serious problem to the business.
On time accounts receivable payment will influence the company’s activities. High receivables turnover will ensure the availability of cash for the company’s operational continuity. While high payable turnover strengthens the trust of the suppliers, which affects the availability of goods or commodities for a company. In this case, it will eventually create a high turnover of goods, and optimize profitability. The working capital for the company will be used effectively and efficient.
In the end, a technology related to the accounts receivable reminder is required. However, the old-fashioned billing is no longer suitable because it may cause inconvenience to the customers. Everything should be managed properly to achieve business harmonization. The business must have the method to collect the receivable a timely manner to utilize the fund. Have you optimized your time to manage business receivable? See Zahir Accounting for the solution in managing receivables.
