A current account is an essential tool used by companies to manage and monitor their financial relationships with customers and suppliers. In today's fast-paced business environment, tracking receivables and payables is crucial for healthy business management.
What is a Current Account?
A current account collects all transactions a company has with its customers and suppliers. When you sell products or services to your customers, you record this transaction as a receivable in the current account. Similarly, when you purchase goods or services from suppliers, you record this transaction as an expense.
Why is Current Account Tracking Important?
Businesses must regularly track financial transactions with their customers and suppliers, especially those with whom they have ongoing relationships. Current account tracking ensures that receivables and payables are managed accurately, helping businesses maintain clear visibility of their cash flow and financial status. These accounts make it possible to ensure timely payments to suppliers, collect receivables on time, and execute effective financial planning.
Current Account in Commercial Law
According to Article 89 of the Turkish Commercial Code, a current account is a relationship in which two parties agree to forgo individually claiming their receivables from each other. Instead, they consolidate these receivables into a single account and settle the balance at the account's closing date. This provides a significant advantage, particularly in ongoing commercial relationships.
Conclusion
Current accounts play a crucial role in organizing businesses' financial relationships. Accurate management of receivables and payables contributes to the healthy growth and sustainability of businesses. By effectively managing your current account tracking, you can strengthen your financial management and support your company's long-term success.
05.07.2024