Collections 101: The significance of receivables analysis

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Any money owed by clients and customers to businesses and debtors is termed accounts receivable. Managing this properly is an important aspect of business, as it affects the overall health of a company.


There are many things accounts receivable can do for a business. It is an integral part in helping a company increase its cash flow. When a business needs goods and services to be available on credit, accounts receivable makes it all the more possible. It promotes goodwill between customers and businesses, and establishes faith and trust in accounts receivable policies. Simply put, having accounts receivable in a business translates to better sales and higher growth rate.

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So, where does accounts receivable money go? It helps a company with a lot of administrative work, such as the regular payment of employees’ salaries and all the bills needed to keep the business operations going. What’s left from it is often called current assets, as it goes to inventories, securities, prepayment, and cash.


It’s crucial that a company have people analyze accounts receivable. Since money is the lifeblood of the business, it should be collected regularly and on time. Along with this analysis is a constant review of policies to ensure that they are up to date (if need be) and have no room for misunderstanding.


Brennan & Clark, LLC is a business collections firm that has been in the industry for more than 30 years. With 150 years of collective experience, its expertise aids companies in achieving well-defined goals for their collection process, evaluating all internal procedures, implementing improvements, and guaranteeing better results on collections. To know more about their services, visit this website.