Sometimes it happens so that you are unable to collect the receivable and as it happens, you should consider writing it down. Whenever your client has financial difficulties, it’s one of the conditions that should make you doubt the ability of the customer to actually pay up what they owe.
Making a sale happen is one thing. You’ve accounted for the receivable from the sale, that’s another thing. Getting paid for the sale and collecting the receivable is entirely another matter. In one of our examples we accounted the receivable and we’ve been lucky enough that our client actually owned to what they had to […]
There are situations where you might be in need of cash or to simply motivate your customers to pay up quicker to have some buffer when it comes to more liquid resources, you’d implement something called a cash discount. The way cash discount works is simple – there’s the expected payment deadline and in addition, […]
So what do you do? Say the initial invoice was for 1,200 and now it turns out that your supplier was wrong and the actual amount should be 1,100. As such, they’re issuing a credit invoice.
When dealing with everyday business you may come upon (or should at least) a question of whether your company is able to continue. Questions you may ask are similar to if there are enough liquid assets to pay up your creditors, is there room for required investments etc. Or possibly also the question whether you’ve […]
As you surely already know, by regulation you’re required to maintain your accounting records for a certain period of time (i.e. 7 or 10 years, the length depends on your local requirements).