Receivable refers to the amount of money owed to a business, indicating that the business is awaiting payment for goods or services provided. For instance, when a customer purchases a toy from a store but delays payment, the store will have a receivable until the customer settles the bill.
Receivable is an adjective that describes something as capable of being admitted or accepted, awaiting payment, or subject to a call for payment. As a noun, it refers to an amount that is owed, particularly by a customer of a business. For instance, a company may have accounts receivable, which are the amounts owed by their customers for the goods or services provided. These accounts are considered as assets on the company’s balance sheet. Another example is a note receivable, which is a written promise to pay a specific amount of money at a later date. Unrealised receivables are the amounts that have been earned but not yet received. These do not have an income-tax basis for cash-basis taxpayers. An example of an unrealised receivable is a company that has completed work for a customer but has not yet received payment for it. In general, receivable refers to the money that is owed to an individual or business, and it is crucial for companies to keep track of their accounts receivable to ensure they receive payment for their services or products.
A receivable refers to an amount owed to a business or individual by another party, typically for goods or services provided on credit.
Receivables are typically recorded as assets on the balance sheet, under the category of accounts receivable.
Accounts receivable represents money owed to a business, while accounts payable represents money owed by a business to its suppliers or creditors.
Yes, you can charge interest on overdue receivables, but it is important to comply with applicable laws and regulations governing interest rates and collection practices.
If a customer fails to pay their receivable, you may have several options, including sending reminders, negotiating a payment plan, or taking legal action such as filing a lawsuit or hiring a collection agency.
Yes, it is possible to sell your receivables to a third party, known as factoring. However, it is important to carefully review the terms and conditions of any factoring agreement before entering into it.
The statute of limitations for collecting a receivable varies depending on the jurisdiction and the type of debt. It is advisable to consult with a legal professional to determine the applicable time limit in your specific situation.
Yes, you may be able to write off a bad debt as a loss for tax purposes, subject to certain conditions and limitations. It is recommended to consult with a tax professional for guidance on the specific requirements.
Debt collection practices are regulated by various laws, such as the Fair Debt Collection Practices Act (FDCPA) in the United States. These laws prohibit abusive, deceptive, or unfair practices and outline the rights and protections of debtors.
Yes, if all attempts to collect a receivable have been exhausted, you may consider taking legal action against a customer who refuses to pay. However, it is crucial to consult with an attorney to assess the viability of your case and navigate the legal process effectively.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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