Allowance for Doubtful Accounts Policy

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This tool contains two sample policies that establish processes organizations can use for ensuring that uniform accounting occurs for allowances for doubtful accounts.

Companies often reserve for uncollectable customer cash payments when invoices are past their due dates. The collection of accounts receivable is an important process in the overall revenue cycle that directly impacts cash flow. The formal collections process occurs when a customer’s account becomes past due, based on the invoice date.

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