NOTE 2. ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following at:

	December 31, 2011			December 31, 2010

Accounts receivable under normal 30 day terms	$	875,013		$	554,963
Financed contracts:
Short-term		357,567			481,289
Current portion of long-term		987,501			828,170
Long-term, net of current portion		1,062,709			260,430
Total accounts receivable		3,282,790			2,124,852
Unbilled accounts receivable		-			14,195
Less allowance for doubtful accounts		(237,844	)		(179,416	)
Accounts receivable, net	$	3,044,946		$	1,959,631

The allowance for financed and trade receivable represents management’s estimate of probable losses in our trade and financed receivables as of the date of the financial statements. The allowance provides for probable losses that have been identified with specific customer relationships and for probable losses believed to be inherent of the trade and financed receivables but have not been specifically identified.

Included in Accounts receivable - Financed contracts at December 31, 2011 and 2010 is $2,050,210 and $1,088,600 with an offset to deferred revenues on the balance sheet of $1,228,629 and $0 at December 31, 2011 and 2010.

A roll-forward of the Company’s allowance for doubtful accounts for the years ended is as follows:

	December 31, 2011		December 31, 2010
Accounts receivable allowance, beginning of year	$	179,416	$	182,054
Provision adjustment during period		58,428		3,247
Write-off of bad debt		-		(5,885	)
Accounts receivable allowance, end of year	$	237,844	$	179,416

The allowance for doubtful accounts is $237,844 for the trade receivables and $0 for the financed contracts.