by Structured Settlement Watchdog
David L. Stokes , author of "The No Asshole Credit Department", seems to have his fruits mixed up a bit
Stokes parrots the J.G. Wentworth mantra about "cash now" in today's Louisville Business First. He goes on to say "For any company selling business-to-business the accounts receivable is “your money” but until it is cash in your bank it is in reality little different than a structured settlement or an annuity". Bad analogy!
What is accounts receivable?
A. Accounts receivable is a current asset because it represents a claim to cash that a company expects to receive within one year.
Structured settlements are generally set up for much longer periods of time. It would not be advisable to set up a structure for less than one year.
B. Accounts receivable represent money owed by entities to the firm on the sale of products or services on credit. In most business entities, accounts receivable is typically executed by generating am invoice and either mailing or elcctronically delivering it to the customer, who, in turn, must pay it within an established time frame, called credit terms or payment terms. Source : Wikipedia
Structured settlements are created by the resolution of a dispute or litigation and represent payments for damages rather than payment for a product or service.There is no invoice. The terms of a structured settlement are fixed and determinable and are set forth in the settlement agreement and qualified assignment agreement, or reinsurance agreement executed by and between the parties.
One does not not need a lawsuit or claim to create and send an invoice to a customer
Stokes's message is that it's cash that is important, not the promise to be paid that the accounts receivable represents.
To some law firm business owners, structured legal fees offer the ability to smooth out income, provide predictability and enjoy tax deferral.
David L. Stokes is self described as " a credit management executive with over 25 years experience in delivering strategically oriented, customer centered, metrics driven results.customer centered, metrics driven results".
Let David L. Stokes be more discerning with his comparisons in the future.
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