Page "Accounts receivable" Paragraph 11

Outstanding advances are part of accounts receivable if a company gets an order from its customers with payment terms agreed upon in advance.

Since billing is done to claim the advances several times, this area of collectible is not reflected in accounts receivables.

Ideally, since advance payment occurs within a mutually agreed-upon term, it is the responsibility of the accounts department to periodically take out the statement showing advance collectible and should be provided to sales & marketing for collection of advances.

The payment of accounts receivable can be protected either by a letter of credit or by Trade Credit Insurance