Accounts receivable iscompany money that has not yet been given to it. Increaseaccounts receivablecan be regarded as an increase in the company's growth rates, the main thing is that debtors repay their debts on time, then there will be no problems with repaying their own debts to creditors.
The difference between the concepts of receivables and payables
Accounts payable is the opposite of accounts receivable. Here we are talking about the company's own debt, which it must pay by a certain date. The concepts of receivables and payables do not always carry a negative connotation of the word "debt". Often these are just accepted, but not yet fulfilled obligations.
For the occurrence of accounts payable, it is not necessary to take a loan from a bank, but for the occurrence of receivables, it is not necessary to lend money. You can only conclude a supply contract, the calculations in which are made a month after receipt of the goods. And all this month the buyer will have accounts payable, that is, the obligation to pay off the contract.
At the same time, the supplier will have a receivable, he will expect payments for the delivered goods within a month. This example shows that two participants in the transaction have different types of debt in relation to one obligation. And until the deadline for fulfilling the obligation comes, both parties perceive this state of affairs as a normal working relationship.
Overdue accounts payable is a problem
The obligation is limited by the period of its execution. Of course, there are perpetual obligations, the execution of which occurs after the presentation of the demand. But here, too, there are time limits, such an obligation may be subject to instant execution or within, for example, three months from the date of receipt of the demand. So it is always possible to determine when the obligation must be fulfilled and thus receivable. Hence the classification of accounts receivable into two types:
- Normal accounts receivable;
- Overdue accounts receivable.
As soon as the due date for the performance of the obligation passes, normal receivables flow into overdue receivables. And this is where you need to take action. Therefore, it is important for the company to organize work to track receivables. You need to know exactly when the maturity date for a particular obligation comes.
It would be nice to track the financial condition of the debtor in order to detect problematic receivables in time. The fact that the obligation may not be fulfilled can be known in advance. If the debtor is on the verge of bankruptcy, the chances that the receivable will be repaid are minuscule. In such situations, you need to fix the outstanding receivables as soon as possible. Immediately after the deadline for fulfilling the obligation, start work on its collection in court. Then, already having a court decision in hand, it will be possible to enter into bankruptcy proceedings as a creditor and receive at least partial compensation on account of receivables.
Liability for malicious evasion from repayment of accounts payable
It is possible to say that the creditor does not want to fulfill his obligations only after the date of fulfillment of the obligation has come. Then the receivables become overdue, and you can start using methods of inducement and even coercion to fulfill the obligation. The creditor, in order to solve the problem of overdue receivables, can go the following way.
The threat of criminal prosecution makes many debtors pay their bills.
The emergence of receivables from one person will certainly lead to the emergence of accounts payable from his counterparty. After fulfillment of the obligation in full, both debts are considered repaid. But if the debtor fails to repay the debt, then the creditor gets the right to use all the methods provided by law and the contract to receive money on account of receivables.
