So you performed receivables confirmation procedure at period end and a receivable balance for say customer A was not confirmed. A fact it was not confirmed and you didn’t receive a reply for your request in itself should indicate that there’s a possible impairment indication. More so, as the days pass, it’s also not paid.  Continue reading →

A key thing to remember with payment terms to your customers is that don’t ask less than what you yourself are given. If your suppliers ask for 10 days to pay up, so should you. Or at least consider it before opting for longer payment terms with your customers.  Continue reading →

Bonuses paid to customers are in some industries more common than in others. For instance where it’s often seen is with wholesale merchants and manufacturers. They drive on quantities since it gives them efficiency when we talk about manufacturing and better deals when we talk about companies who buy items in bulk to wholesale them further to stores for an example. In some industries it’s important to give your customers bonuses based on some predetermined conditions to keep your own business flourishing. Continue reading →

We have now discussed factoring agreements with recourse however what if the risks prevailing are indeed transferred? If you’ve signed on an agreement where you’re in fact selling the receivables and you’re no longer and will not be in future responsible or taking risks in relation to the collection of the invoices, you’ve in fact sold them receivables for good and you can account for the actual collection of the receivables once you’re being paid by the financing company (i.e. bank).  Continue reading →

To understand your factoring agreement and its conditions means you understand the risks prevailing and the implications the agreement in force has on your company and its financial statements as they are.  Continue reading →

You’re probably wondering what are factored receivables. First things first, they have nothing to do with factories.  Continue reading →

Sales revenue and receivables are balances that are reported on statement of cash flows. They are cash movements (mostly at least) and as such, they are most certainly reflected on the statement, however the question of ‘where’ remains.   Continue reading →