For businesses, what’s in their cash account isn’t quite the whole picture. That is where accounts payable (amount owed to service providers) and accounts receivable (amount awaiting a client payment) come in.
What money is owed versus what money is being received can make a business profitable or in the red. That is why it is very important for merchants to manage their accounts receivable to ensure they are healthy and thriving.
If a merchant billed their vendors every hour, day or week, invoicing would become tedious and time consuming for both buyers and suppliers. Instead, merchants typically invoice on a monthly basis and expect payment within 60 days. This billing action represents the value of a month’s worth of work and is best managed on a consistent and routine basis.
Please select this link to read the complete blog post from OSAP member i3 Commerce Technology.