Our Accounts Receivable Policy establishes procedures to ensure consistency in your company’s accounting treatment of receivables. It covers various aspects of receivable management, including when to reserve, write off or recover a receivable, and how to handle billings, cash receipts and credit memos. It also provides guidelines on maintaining internal controls and accurate records within the accounts receivable function.  

The document is designed to safeguard the company's assets, promote efficient operations, and ensure the proper valuation and reporting of trade accounts receivable, a major asset for many companies. Thus, it can be used by various departments within a company, including accounting, sales, quality control and production planning. It can also serve as a reference for developing necessary activities to ensure that the policy is understood and being followed across different business units.

Consider the following factors when setting the value for the reserve account:

• Current and predicted sales levels
• Current and predicted inventory levels
• Current earned benefits information provided by program administrators
• A historical analysis of actual trends