Accounts receivable is one of the sources of business income, which reflects the scale and effect of business activities. When an enterprise sells goods or provides services, it will sign a sales contract or service contract with its customers, stipulating the payment period and amount, and the customers should pay the money to the enterprise within the agreed time. However, in practice, customers may not be able to pay their accounts on time due to various reasons such as insufficient funds and low willingness to pay.
The existence of accounts receivable makes enterprises face certain risks, because not receiving customers' money will affect the cash flow and capital turnover of enterprises. In order to alleviate this risk, enterprises usually formulate strict credit policies, strengthen communication and collection with customers, and also need to conduct risk assessment and management to reduce the risk of bad debts.
Accounts receivable are mainly recovered in the following ways:
1. Cash collection: customers pay accounts receivable directly in cash.
2. Cheque collection: customers pay accounts receivable by cheque.
3. Bank remittance: customers pay accounts receivable through bank transfer.
4. Electronic payment: customers pay accounts receivable through electronic payment platforms (such as Alipay and WeChat payment).
5. Acceptance bill: the customer pays the accounts receivable by acceptance bill, that is, pays the company the arrears in the form of bills.
6. Collection of promissory notes: The customer and the company agreed in the contract to pay the accounts receivable by promissory notes, that is, to pay the arrears on a specific date.
7. Credit card payment: customers pay accounts receivable by credit card.