Final answer:
Factoring and assignment are two methods to generate cash from accounts receivable.
Step-by-step explanation:
One method to generate cash from accounts receivable is through factoring. Factoring involves selling accounts receivable to a third-party company called a factor at a discounted price. The factor then collects the full amount from the customers who owe the money and pays the company a portion of the amount as cash.
Another method is through assignment. Assignment involves using accounts receivable as collateral to secure a loan. The company assigns its receivables to a lender who provides cash based on the value of the receivables. The company is then responsible for collecting the payments from the customers and repaying the loan.