Know the warning signs – Monitoring accounts receivable can minimize default risk

Description

Abstract: Accounts receivable represent the amount of money that customers owe a borrower for purchases. If a borrower pledges accounts receivable as collateral to qualify for a loan or line of credit, the lender typically claims them to cover losses if the borrower defaults on repaying its debts. But poorly maintained or fraudulent balances hobble lenders’ ability to recover losses. This article discusses the importance of monitoring borrowers’ accounts receivable to ensure they’re legitimate and collectible.