Accounts receivable in the balance sheet of the enterprise are reflected in the accounts of accounting, in the statements of the company and are constantly monitored. This category of assets is considered liquid in the absence of arrears. The amount goes into the number of doubtful debts when the payment is delayed.
What is accounts receivable
This type of debt may include accountable amounts, loans issued, third party liabilities, overpayments for employee benefits. Accounts receivable mean funds that must be paid by counterparties in favor of the company on a deferred payment terms agreed by both parties. Its formation occurs in the following cases:
- Deferral of payment for work, goods or services provided.
- Failure by one of the parties to comply with the terms of the contract regarding payment for the services or goods provided.
- Prepayment to the supplier in the absence of goods.
- The presence of an annual subscription to periodicals.
- Overpayment in insurance premiums, tax fees and payments.
In respect of receivables, outstanding balances must be monitored in the balance sheet, which are correlated with the expected dates of payments, illiquid debts are identified and the reasons for their occurrence are clarified. Working with receivables involves collecting all the possible information about the state of accounts and looking for ways to reduce bad debts. Debts of counterparties are divided into several groups:
- By maturity - long-term (more than a year) and short-term receivables (line 1230 in the balance sheet, time period - up to 1 year).
- According to the effectiveness of collection methods - current (deadlines for payment on it have not come), hopeless and doubtful (with overdue repayment dates, but with confidence in crediting money as soon as possible).
Overdue receivables mean situations in which money for goods shipped did not arrive at the current account or goods were not provided as soon as possible after full prepayment. The expiration of the limitation period may also serve as a reason for transferring debt to the category of overdue.
The control of receivables in the balance sheet is carried out in several stages:
- The contract sets the terms for crediting funds.
- Payments are monitored, the delay period of which does not exceed 7 days. The reasons for what happened are clarified, a debt repayment schedule is being developed, and cooperation is suspended.
- If the payment is delayed for a period of 7 to 30 days, then the counterparty will be charged a fine and a notification will be received on the need to fulfill his obligations.
- A written claim is filed with a delay of 1 to 2 months.
- Long delays are a cause for action.
In accounting, there are several active-passive accounts, receivables in the balance sheet of which are reflected. The formation of a debit balance for a group of settlement accounts indicates the occurrence of debt. According to the encoding of the chart of accounts, receivables are reflected in the following accounts:
- 60 or 62 - for settlements with customers and suppliers;
- 68 or 69 - for overpayments on insurance premiums, fees and taxes;
- 70.71 and 73 - for the calculation of employees;
- 75 in the presence of debts of the founders;
- 76 - for settlements with debtors of various types.
Assessment and Analysis
Valuation of receivables in the balance sheet involves determining its market value at a specific date. The amount indicated in the credentials may not coincide with the result. A similar analysis is used for management accounting, when conducting a comprehensive assessment of the enterprise and operations for transferring claims. Professional experts are contacted when it is necessary to provide assessment data to third-party users.
The analysis of receivables is carried out by determining the total debts of customers, their classification into groups and monitoring the dynamics of changes. The results are entered in the table. The financial stability of the company can be undermined by the number of long-term debts, in connection with which the identification of their share is an important step in the analysis.
Where in the balance sheet of receivables are data
The balance sheet contains several lines for receivables. First, net debt is fixed - the amount that should be received by the company in reality.
The second line indicates the initial value of the debt - the amount that debtors must pay in accordance with the terms of the contract.
In practice, the amount received by the company after paying off the debt is much less than that indicated in the documentation.
Accounts receivable in the balance sheet are classified according to the following types of debtor:
- Domestic debtors.
- Budget companies.
- Other companies that owe a certain amount.
So, now it’s clear what receivables are. It means not only financial debts, but also the untimely provision of work and services, disruptions in the supply of goods and so on.
It should be borne in mind that receivables are an aggregate indicator based on arrears in accounting accounts.
How is the debt reflected in the balance sheet
In the explanatory notes to accounting, the indicator of accounts receivable is necessarily deciphered, since it is an important indicator. In obsolete reports, it was given in lines 230 and 240, in the modern version - in line 1230, which indicates long-term and short-term debts.
Line 1230 balance sheet is formed from the balance of the current accounts, which are used when accounting for receivables. The totals for these accounts are taken from the debit for December 31 of the reporting year. Line 1230 of the balance sheet is represented by several accounts - 60, 62, 68, 69, 70, 71, 73, 75, 76.
When writing information to the balance in line 1230, the following data is entered:
- Debts with a maturity of one year or less are listed;
- Amounts less allowance for doubtful receivables are shown in the balance sheet.
Line 1230 of the balance sheet does not reflect amounts with a maturity of more than one year. For such cases, line 1190 of the balance sheet applies. In the Notes to the balance sheet provides a detailed description of the types and structure of receivables.
It should be borne in mind that line 1230 of the balance sheet does not reflect fully paid off or written off receivables. Information about them, respectively, is not given in the notes to the balance sheet.