Trade Receivables in Accounts Receivables
Receivables have always been a factor in business. In simpler times, a business only needed to trade with other businesses to get what it needed. As economies expanded and methods of trading changed, so did the necessity for trade receivables. When a business sells goods, it normally expects to receive payment for those goods. If the customer does not pay, then the business has a receivable that it can use to finance future purchases. Trade Receivables provide a financial cushion for a business, allowing it to continue to operate even when sales are low. They are also an important factor in a company’s credit rating.
