Short-Term Notes Receivable are debt contracts (promissory notes)
that mature within one year (i.e., in the next accounting period). They are
used mostly to restructure accounts receivable that are in default into regular
debt contracts with interest (sometimes pretty steep) and installment payments.
Some companies may offer their customers a choice between
paying cash upfront or signing a promissory note and paying interest. Which
compensates a company for risks incurred. In the latter case, you have to
perform a thorough financial analysis to make sure that the rewards are,
indeed, worth the risks.
No comments:
Post a Comment