Accounts Receivable - Assignment
Overview of this form
The Accounts Receivable Assignment form is a legal document that allows an assignor to transfer their rights to collect payments on outstanding invoices to an assignee. This form specifies the accounts being assigned and ensures that the assignee will receive all money due on those accounts. It is important for businesses seeking to manage their cash flow by assigning accounts receivable, differentiating it from other forms of debt transfer or assignment.
Main sections of this form
- Identification of the assignor and assignee
- Details of the accounts being assigned, including balances and account debtor information
- Warranties from the assignor regarding the validity of the accounts
- Provisions for future payments and handling of defaults
- Signature lines for both parties
When to use this form
This form is typically used when a business wants to assign its outstanding receivables to another party, often for financing purposes. It is useful in scenarios where the assignor needs immediate cash flow and wishes to transfer the responsibility of collection to the assignee, such as when seeking a loan based on accounts receivable or when selling the business.
Who should use this form
The following individuals or entities may benefit from using this form:
- Small business owners managing cash flow
- Accounting and finance professionals handling receivables
- Legal practitioners advising clients on finance and business matters
- Companies looking to secure loans using receivables as collateral
Steps to complete this form
- Identify the assignor and assignee by entering their names and addresses.
- List the outstanding accounts to be assigned in the attached Exhibit A, including balances and debtor information.
- Confirm representations regarding the accounts, such as payment contingencies and any defenses or offsets.
- Specify the effective date of the assignment and agree on handling future payments.
- Ensure both parties sign and date the document to finalize the assignment.
Notarization guidance
Notarization is generally not required for this form. However, certain states or situations might demand it. You can complete notarization online through US Legal Forms, powered by Notarize, using a verified video call available anytime.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Avoid these common issues
- Failing to include all relevant accounts in Exhibit A
- Not providing accurate debtor information
- Omitting signatures or dates from the assignment
- Neglecting to confirm that all accounts are unencumbered by liens
Why use this form online
- Convenient download and completion from anywhere
- Editability allows for customization to specific needs
- Access to forms drafted by licensed attorneys for reliability
- Fast and easy way to manage accounts receivable assignments
Legal use & context
- Enforcement of the assignment depends on proper documentation and validity of the accounts.
- Assignees must verify the condition of the accounts to avoid liabilities.
- This form serves as a transfer of rights and includes protections for both parties.
Summary of main points
- The Accounts Receivable Assignment form facilitates the transfer of collection rights from one party to another.
- Completing the form accurately is crucial to ensuring the enforceability of the assignment.
- This form is useful for businesses looking to enhance cash flow without extensive processing delays.
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FAQ
It is not uncommon that companies with cash flow problems or those that have a desire to be paid on expedited terms assign their accounts receivables as collateral for a secured loan or they factor them.In the case of factoring, the contractor sells its accounts receivable to the financial institution or the factor.
Accounts Receivable (A/R) is the money owed to a business by its clients. The main objective in Accounts Receivable management is to minimise the Days Sales Outstanding (DSO) and processing costs whilst maintaining good customer relations.
Assignment of accounts receivable is a lending agreement whereby the borrower assigns accounts receivable to the lending institution.The borrower pays interest and a service charge on the loan and the assigned receivables serve as collateral.
The purpose of assigning accounts receivable is to provide collateral in order to obtain a loan. To illustrate, let's assume that a corporation receives a special order from a new customer whose credit rating is superb.
Basics of Accounts Receivables Accounts receivable (or debtors) represent money owed to a business by its clients (customers). It is shown on its balance sheet as an asset. It is one of a series of accounts dealing with the billing of a customer for goods and services that the customer has ordered.
Accounts receivable is any money your customers owe you for goods or services they purchased from you in the past. This money is typically collected after a few weeks, and is recorded as an asset on your company's balance sheet. You use accounts receivable as part of accrual basis accounting.
Accounts receivable is a common account used by company accountants to track revenue earned but not yet collected. It is a balance of money owed to the business by buyers who make purchases on account and agree to pay later.
An example of accounts receivable includes an electric company that bills its clients after the clients received the electricity. The electric company records an account receivable for unpaid invoices as it waits for its customers to pay their bills.
