What are receivables and obligations?

receivables and liabilities are financial transactions that represent the money owed by a third party or the money owed by a third party. These transactions are recorded in the Company's accounting system as receivables and accounts due. Another way of thinking about receivables and obligations is to extend the loan, either from the company to its customers or from the outside to the company.

businesses receive many different types of payments for goods and services. The simplest payment method is cash when delivering or offering a full payment with the current product exchange. Although cash in delivery is usually an optimal method of payments for businesses, it does not provide the customer's great financial flexibility. To encourage customers to buy, many businesses allow them to buy on loan. Customers who buy loan take immediate possession of goods or services for the promise to pay later.

There are two Types Loan Types that the company must monitor through its accountantsystem. The first type is expanded from business to its customers. This is monitored on the company's books as a receivables or money that the company expects to receive in the future. Monitoring the loan extension as a receivable allows the company to record reserves according to the sale and at the same time record the reason for the deficit in the collection of cash.

The second type of credit that trade monitors through its accounting system is one that is extended to it from other businesses. For example, some businesses have credit accounts with their suppliers, allowing them to order supplies without having to pay for it until a certain future. This gives the flexibility of business cash flows because it can often sell supplies before they have to pay. Payments that the business undertake for the goods or services received on the loan are monitored in their accounting system as obligations.

Many large businesses haveDepartment, which are specially devoted to handling receivables and obligations. Although receivables and obligations are monitored in the company's books, these financial transactions also come up with a relational component that requires continuing management. Customer extension often requires regular correspondence through statements and account reminders. Likewise, the credit relations of the company with external parties require constant attention to ensure that payments are made in time or extending time for payment are required.