"First party collections" refers to a company using its own employees, usually within the accounts receivable department, to collect on unpaid invoices. "Third party collections" are collections efforts made by a collections agency, outside of the original crediting company.
Collections representatives perform the duties required to collect on overdue invoices and accounts.
Days Sales Outstanding (DSO) is an accounts receivable term that measures the average amount of time to collect funds from credit sales.
Factoring is selling your company's accounts receivable invoices at a discount to a third party for immediate cash.
A Credit Manager works within an accounting department to help determine the credit risk and credit-worthiness of clients.
An accounts receivable department (A/R) may divide responsibilities among the team to include credit managers, credit analysts, clerks, and collections specialists. This division of tasks helps accounts receivable management to be as efficient and productive as possible.
B2B is a term used for marketing or sales activities between two businesses. Alternatively, B2C defines activity between a business and a consumer.
Aging report refers to a list of credit or accounts receivable invoices that remain outstanding.
Accounts Receivable Turnover Ratio is a measurement of a company's effectiveness of its credit policies and its collections of accounts receivable.
Last month, Senator Jeanne Shaheen, a ranking member of the U.S. Senate Committee on Small Business & Entrepreneurship, released a report titled, "Tackling the Gender Gap: What Women Entrepreneurs Need to Thrive." In the report, female business leaders shared their incredible stories but also highlighted the challenges they face in business, in balancing family and work life, and in raising capital for their companies. A common theme dominated the struggles of women entrepreneurs - the failure to ask for what they are worth.
Calculating your business' accounts receivable turnover is one of the most telling year-end accounting best practices. This ratio will offer a huge clue about your business successes and near-misses in extending business credit and collecting on what's owed. The value of this number will help determine weaknesses in your accounts receivable processes so improvements can be made.
