Mastering Business Accounting and Financial Transactions

Provisions for Pending Receipts

This passive account is used when an entrepreneur needs to account for operations where the final invoice or formal document is pending. It is replaced once the correct invoice is provided.

Advances to Suppliers and Future Supplies

This active account represents amounts your company provides for future supplies. It is used for specific items and never for the payment of an unpaid invoice. These remain pending before the reverse transaction occurs.

VAT and Treasury Account Management

The subscription is charged with the Treasury; a given money amount is earmarked to reflect the VAT. This includes VAT paid for purchases and the remaining VAT balance.

Customers with Pending Invoices

This form is used when, for accounting reasons, we need to reflect a sale or a provision of service before the invoice is issued. This is an active account where the debit arises. The subscription is charged with sales of goods and benefits of services.

Advances on Remuneration and Salaries

These are balances for the company representing amounts paid to its workers before the salary becomes due. This is an active account. It is loaded with a credit to the Treasury and is paid for salaries and wages.

Debts for Operating Concessions

Use this when the company receives notice to receive any operation from a public organization. The credit is loaded with donated and bequeathed amounts to the operator, to be paid for from the treasury.

Managing Doubtful Customer Accounts

When a business credit enters a potential insolvency situation, we refer to it as credit deterioration. The balance is transferred to "doubtful customers" to indicate reasonable doubt regarding collection. This is an active account, loaded with a credit to customers. It reflects the deterioration until we know the final status of the open account.

Commercial Effects Payable and Portfolio

Commercial effects payable is a passive account used when the company provides a letter of credit or agrees to a payment term. It is charged with providing credit to the Treasury. Commercial effects in portfolio are assets used when turning a letter to customers and accepting it. It is loaded with a credit to customers and other financial income.

Discounted and Collection Management Effects

When a company owns commercial effects and needs liquidity, it can negotiate or discount these effects. This account reflects the situation when they are delivered to the bank. It is loaded with the commercial effect portfolio. For collection management, when the company has effects in its possession for liquidity without discounts, the account is active and loaded with the portfolio, paid through a bank for services and similar fees.

Unpaid and Outstanding Commercial Effects

When commercial effects are not served at maturity, they are moved to this account. The credit is loaded with the commercial effect portfolio and discounted effects.