{"id":2974,"date":"2018-09-13T03:13:21","date_gmt":"2018-09-13T03:13:21","guid":{"rendered":"https:\/\/www.intrepidexecutivegroup.com\/blog\/?p=2974"},"modified":"2018-09-17T05:21:44","modified_gmt":"2018-09-17T05:21:44","slug":"what-is-accounts-receivable","status":"publish","type":"post","link":"https:\/\/www.intrepidexecutivegroup.com\/blog\/what-is-accounts-receivable\/","title":{"rendered":"What is Accounts Receivable?"},"content":{"rendered":"

Not all businesses require customers to pay immediately when purchasing a product or service. Some businesses allow customers to pay after they’ve made a purchase. Known as accounts receivable, it’s an internal form of credit in which a business sells a product or service to a customer under the agreement that the customer will pay for it in the future. Continue reading for more information on what is accounts receivable.<\/p>\n

What is Accounts Receivable?<\/span><\/h2>\n

\"\"<\/a>Overview of Accounts Receivable<\/span><\/h2>\n

Accounts receivable refers to outstanding invoices that clients owe to a company for products or services rendered. Accounts receivable <\/a>is\ufffddesigned to help customers purchase products or services.<\/p>\n

Accounts receivable may be recommended if a customer doesn’t have the necessary funds on hand to buy a product or service. The business transfers the product or service to the customer, while the customer agrees to pay for it, typically by making weekly or monthly payments.<\/p>\n

The repayment terms of accounts receivables vary depending on the business. Some businesses use one- or two-month term lengths, whereas others use year-long term lengths. Some businesses also offer accounts receivable to customers at no additional charge. Others may charge interest on any balance owed.<\/p>\n

Pros and Cons of Accounts Receivables
\n<\/span><\/h2>\n

Business owners can benefit from offering accounts receivables to customers in several ways. First, it typically attracts new customers who would otherwise not have been able to purchase a product or service due to financial challenges. Second, it helps businesses foster long-term relationships with their customers. Third, accounts receivables can be used to secure funding from a private lender.<\/p>\n

\"\"<\/a>But there are some drawbacks to using accounts receivables. Statistics show<\/a> that nearly half of all credit-based purchases are paid late. If a business begins to offer accounts receivables to its customers, it may experience more late payments.<\/p>\n

The good news is that accounts receivable funding, such as factoring, takes this burden off the business’s shoulders. With factoring, the business sells its accounts receivables — unpaid customer invoices — to a private lender<\/a>, who is then responsible for collecting the money from customers.<\/p>\n

How Accounts Receivables are Recorded<\/span><\/h2>\n

Accounts receivables are typically recorded as assets on a business’s balance sheet. This is because accounts receivables are valuable and worth money. Therefore, businesses treat them as such by recording them as assets on their balance sheet.<\/p>\n

This article was brought to you by\ufffdIntrepid Private Capital\ufffdGroup<\/a>\ufffd\ufffd A Global Financial Services Company. For more information on startup and business funding, or to complete a funding application, please visit our\ufffdwebsite<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Not all businesses require customers to pay immediately when purchasing a product or service. Some businesses allow customers to pay after they’ve made a purchase. [Read More…]<\/a><\/p>\n","protected":false},"author":2,"featured_media":2984,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[548,549,467,550,97,437,127,396,174,397],"class_list":["post-2974","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-accounts","tag-accounts-receivable","tag-accounts-receivable-financing","tag-accounts-receivable-funding","tag-business","tag-business-funding","tag-financial","tag-financial-services","tag-funding","tag-funding-sources"],"yoast_head":"\nWhat Is Accounts Receivable? How Does it Work?<\/title>\n<meta name=\"description\" content=\"What is accounts receivable? 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