Editing Accounts receivable (section)

== Special uses ==
Companies can use their accounts receivable as [[Collateral (finance)|collateral]] when obtaining a [[loan]] ([[asset-based lending]]). They may also sell them through [[factoring (finance)|factoring]]. Pools or portfolios of accounts receivable can be sold to third parties through [[securitization]].

For tax reporting purposes, a general provision for bad debts is not an allowable deduction from profit<ref>{{cite web|last=HM Revenue & Customs |title=Company Taxation Manual |url=http://www.hmrc.gov.uk/manuals/ctmanual/ctm55710.htm |access-date=2008-11-01 |url-status=dead |archive-url=https://web.archive.org/web/20090418073621/http://www.hmrc.gov.uk/manuals/ctmanual/ctm55710.htm |archive-date=2009-04-18 }}</ref>—a business can only get relief for specific debtors that have gone bad. However, for financial reporting purposes, companies may choose to have a general provision against bad debts consistent with their past experience of customer payments in order to avoid overstating debtors in the [[balance sheet]].