“Cash collection”

definition

Cash collection, also known as payment collection, is a treasury function that describes the process whereby a company recovers cash from other businesses (or individuals) to whom it has previously issued an invoice.

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The issuance of every invoice includes its terms of payment, which determine the maximum time that the company receiving the invoice has to make the payment.

One of the cash collection team’s main tasks is to recover due payments from all outstanding invoices before they are overdue and to manage new payment settlements or credit terms in order to avoid debts becoming ‘doubtful’ or ‘bad’.

In the case of companies with significant volumes of payments, manual collection and reconciliation processes are arduous and time-consuming. These companies normally use tools like Kantox currency accounts to streamline processes, minimise human error and, ultimately, simplify cash collection tasks.

 


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