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Does diversified group of client helps managing cash flow better than single customer.
Your cash flow is the money you have coming in from revenue and going out for expenses. Good cash flow management will ensure you always have money available for paying your expenses when they are due.
Having a healthy collection policy will reduce the aging of unpaid accounts. Having a successful law practice includes getting paid promptly.
Under this balance sheet allowance method, the amount added to the allowance account is calculated using an aging of the accounts receivable.
Receivables are generally expected to be collected within30 days from the date of sale.
An aging breaks down the receivables into current (i.e., due within30 days of the date of sale) and subsequent30-day increments of when the receivable is expected to be collected (i.e past due amounts).
When a company uses this method, it summarizes the total amount of all its uncollected from its aging schedule and that becomes the amount of the allowance for doubtful accounts.
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