Cash collection is the process of collecting cash payment to fulfill the debts of customers' overdue invoices. Debts currently being processed for cash collection are said to be in collections.[1]
Invoices are always issued with terms of payment.[2] These terms vary widely from 'Cash terms', meaning that the invoice is due immediately[citation needed], to many forms of 'Credit terms' (for example 30 days from date of invoice[3]).
Unpaid invoices are considered outstanding, and those which remain unpaid for periods longer than their 'terms' indicate are considered overdue. It is the aim of the Cash collection function of a business to collect Monies for all outstanding invoices before they become overdue and to mediate payment arrangements to ensure that invoiced debts do not become doubtful or bad.
Original source: https://en.wikipedia.org/wiki/Cash collection.
Read more |