Cash collection

Cash collection is the process of collecting cash payment to fulfill the debts of customers' overdue invoices. Debts currently being processed for cash collection are said to be in collections.

Invoices are always issued with terms of payment. These terms vary widely from 'Cash terms',, to many forms of 'Credit terms' (for example 30 days from date of invoice ).

Unpaid invoices are considered outstanding, and those which remain unpaid for periods longer than their 'terms' indicate are considered overdue. It is the aim of the Cash collection function of a business to collect Monies for all outstanding invoices before they become overdue and to mediate payment arrangements to ensure that invoiced debts do not become doubtful or bad.