Outsourcing Financial Services: What are Accounts Receivable Services?

Accounts receivable can be defined as one of the many accounting transactions. Accounts receivable services deal with the billing of customers who owe a certain amount of money for the services/products bought from an organization, company or individual. In most organizations, accounts receivable services are carried out by generating an invoice and then sending the same to the customer.

After the customer receives the invoice, he/she must pay the amount within the time period, which is known as payment/credit terms. Some of he most common payment terms are Net30 which means that the amount should be paid within a 30 day period, Net45 which states that the amount is due within 45 days and Net60 which means that the customer should pay the amount within 60 days.

On every company’s balance sheet, accounts receivables will be the amount that customers owe to a particular company. In the journal entry in the balance sheet, the receivables are marked in the debit column ad the revenue account is marked in the credit column. After the customer pays the amount, the cash is debited and the receivables are credited. The balance on the trial balance sheet for accounts receivables is always debited.

Large business organizations use accounting software to perform accounts receivable services. Organizations allocate an allowance for bad debts, because they might not be able to collect all the debts from customers. This bad debts allowance will be subtracted from the total accounts receivable.
Accounts Receivable Services