Accounts Receivable Collection

Apr 26 05:46 2006 Peter Emerson Print This Article

This article provides useful, detailed information about Accounts Receivable Collection.

Accounts receivable factoring refers to a process in which you can sell your invoices to a financing company for a rate,Guest Posting less than the face value of the invoice sold.

The responsibility of collecting cash against the outstanding receivables lies with the financing company, who then makes a profit by collecting the funds at the face value of the invoice. The advantage of this arrangement is that a firm can receive instant cash, which was otherwise tied up in inventory, to further expand the business.

Again, the responsibility of collecting the cash against the invoices lies with the financing company. To collect the cash, the financing company needs to keep the outstanding receivables as current, and then work out a time line to collect the cash. Also, it is very important to keep a track or record of all communications that took place between the financing company and the customers. This can be done by keeping records of copies of letters, notes, date and time of phone calls and the name of person contacted.

The company first sends a friendly reminder letter to the customer to remind him that the date of the invoice is past due. In addition to sending a formal reminder in the form of a letter, the company also contacts the customer by phone. Apart from sending a reminder, the phone call is also intended to talk to the customer personally and enquire about the reason for late payment. For example, the payment might have been delayed because of the problems with sales or merchandise and this may require sorting out.

After the first letter and the phone call, the company waits for a few days for the customer\'s response and then once again sends the billing letter and makes another phone call as a reminder. If after this there is still no response, the company then contacts the customer with the collection agency letter. This is basically to give the customer one last opportunity to clear his dues.

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Peter Emerson
Peter Emerson

Accounts Receivable Financing provides detailed information on accounts receivable factoring, accounts receivable collection, accounts receivable factoring companies, accounts receivable financing and more. Accounts Receivable Financing is affiliated with Accounts Receivable Collection.

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