![]() The golden rule in accounting is that debit means assets (something you own or are due to own) and credit means liabilities (something you owe). Knowing this will help you plan ahead or change your processes to better manage your cash flow and operate more flexibly. You might notice some clients always take longer than 30 days to make payments. If you keep on top of your accounts receivable, you’ll soon pick up patterns around how your customers or clients pay. And on the balance sheet, you’ll remove the amount from accounts receivable and add it to your cash total (whatever is left of it).
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