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'''Cash collection''' is the process of collecting [[cash]] payment to fulfill the debts of customers' overdue [[invoice]]s. Debts currently being processed for cash collection are said to be '''in collections'''.<ref>{{Cite web |title=Cash Collection - The Accounts Receivable Function Explained |url=https://agicap.com/en/article/cash-collection-explained/ |access-date=2024-01-13 |website=agicap.com |language=en}}</ref><ref>{{Cite web |last=Yale |first=Aly |date=2022-09-22 |title=What happens if your debt is sent to collections? - CBS News |url=https://www.cbsnews.com/news/debt-collections-credit-reports/ |access-date=2024-01-13 |website=www.cbsnews.com |language=en-US}}</ref> |
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'''Cash collection''' is the recovery of cash from a business or individual with which one has issued an [[invoice]]. |
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Invoices are always issued with terms of payment.<ref>{{Cite web|url=http://www.businesslink.gov.uk/bdotg/action/detail?r.s=sc&r.l1=1073858790&r.lc=en&r.l3=1073965654&r.l2=1084596842&r.i=1073791760&type=RESOURCES&itemId=1073791761&r.t=RESOURCES|title = Invoicing and taking payment from customers}}</ref> These terms vary widely from ' |
Invoices are always issued with terms of payment.<ref>{{Cite web|url=http://www.businesslink.gov.uk/bdotg/action/detail?r.s=sc&r.l1=1073858790&r.lc=en&r.l3=1073965654&r.l2=1084596842&r.i=1073791760&type=RESOURCES&itemId=1073791761&r.t=RESOURCES|title = Invoicing and taking payment from customers}}</ref> These terms vary widely from 'Cash terms', {{citation needed span|text=meaning that the invoice is due immediately|date=June 2015}}, to many forms of '[[Credit (finance)|Credit]] terms' (for example ''30 days from date of invoice''<ref>{{cite web|url=http://www.businesslink.gov.uk/bdotg/action/detail?r.s%3Dsc%26r.l1%3D1073858790%26r.lc%3Den%26r.l3%3D1080387371%26r.l2%3D1084596842%26r.i%3D1080400524%26type%3DRESOURCES%26itemId%3D1080395671%26r.t%3DRESOURCES |title=Getting your terms and conditions right | Business Link |accessdate=2010-04-11 |url-status=dead |archiveurl=https://web.archive.org/web/20110610201208/http://www.businesslink.gov.uk/bdotg/action/detail?r.s=sc&r.l1=1073858790&r.lc=en&r.l3=1080387371&r.l2=1084596842&r.i=1080400524&type=RESOURCES&itemId=1080395671&r.t=RESOURCES |archivedate=2011-06-10 }}</ref>). |
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Unpaid invoices are considered '''outstanding''', and those which remain unpaid for periods longer than their 'terms' indicate are considered '''overdue'''. It is the aim of the Cash collection function of a business to collect [[Monies]] for all outstanding invoices before they become overdue and to mediate payment arrangements to ensure that invoiced debts do not become [[Doubtful debt|doubtful]] or [[Bad debt|bad]]. |
Unpaid invoices are considered '''outstanding''', and those which remain unpaid for periods longer than their 'terms' indicate are considered '''overdue'''. It is the aim of the Cash collection function of a business to collect [[Monies]] for all outstanding invoices before they become overdue and to mediate payment arrangements to ensure that invoiced debts do not become [[Doubtful debt|doubtful]] or [[Bad debt|bad]]. |
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Revision as of 04:37, 13 January 2024
Cash collection is the process of collecting cash payment to fulfill the debts of customers' overdue invoices. Debts currently being processed for cash collection are said to be in collections.[1][2]
Invoices are always issued with terms of payment.[3] These terms vary widely from 'Cash terms', meaning that the invoice is due immediately[citation needed], to many forms of 'Credit terms' (for example 30 days from date of invoice[4]).
Unpaid invoices are considered outstanding, and those which remain unpaid for periods longer than their 'terms' indicate are considered overdue. It is the aim of the Cash collection function of a business to collect Monies for all outstanding invoices before they become overdue and to mediate payment arrangements to ensure that invoiced debts do not become doubtful or bad.
See also
References
- ^ "Cash Collection - The Accounts Receivable Function Explained". agicap.com. Retrieved 2024-01-13.
- ^ Yale, Aly (2022-09-22). "What happens if your debt is sent to collections? - CBS News". www.cbsnews.com. Retrieved 2024-01-13.
- ^ "Invoicing and taking payment from customers".
- ^ "Getting your terms and conditions right | Business Link". Archived from the original on 2011-06-10. Retrieved 2010-04-11.
External links
Wikiquote has quotations related to Cash collection.