Now and again I find it necessary to discuss receivables and their possible impairment. It\u2019s not a question of if this should be done in my eyes, but when. However, let\u2019s discuss both, the \u2018if\u2019 and the \u2018when\u2019. \u00a0<\/p>\n
Accounts receivables are assets on your balance sheet and as it happens, assets tend to be more prone for losing their value. Either it\u2019s through them being damaged, no longer usable or simply there not being a market anymore for them. The same could be said for receivables. It\u2019s possible that they may no longer be \u2018usable\u2019 in not a direct meaning of the word, but figurative sense. A receivable is something you ought to receive from someone else, but what if this \u2018someone\u2019 isn\u2019t able to give anything to you. So there\u2019s the reason you ought to assess receivables value, whether they\u2019re recoverable or not.<\/p>\n
Now the question of when this should be done. Accounting standards refer to the words \u2018regular\u2019 meaning that the assessment should be happening frequently. I would suggest reviewing your balances that are overdue for a reasonable interval factoring also in your need for cash to maintain your business. If there are significant unpaid balances that are overdue, there\u2019s an indication that they may not be recoverable or the client is managing their cash flows in the way that they only pay when you ask. This, however, causes you problems. I would consider reviewing your overdue receivables at least once a month, but why not more often.<\/p>\n","protected":false},"excerpt":{"rendered":"
Now and again I find it necessary to discuss receivables and their possible impairment. It\u2019s not a question of if this should be done in my eyes, but when. However, let\u2019s discuss both, the \u2018if\u2019 and the \u2018when\u2019. \u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[69],"tags":[],"class_list":["post-5147","post","type-post","status-publish","format-standard","hentry","category-1-17-accounts-receivable"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5147","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=5147"}],"version-history":[{"count":1,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5147\/revisions"}],"predecessor-version":[{"id":5148,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5147\/revisions\/5148"}],"wp:attachment":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=5147"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=5147"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=5147"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}