NOTE 6 - ACCOUNTS RECEIVABLE

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 6 – ACCOUNTS RECEIVABLE

The Company’s accounts receivable, net, at September 30, 2016 and December 31, 2015, respectively, consisted of the following:

Category	September 30, 2016			December 31, 2015
	(Unaudited)
Trade receivables	$	1,882,155		$	1,360,929
Other receivables		23,708			26,360
Elimination of unpaid deferred revenue		(1,225,455	)		(861,024	)
Allowance for doubtful accounts		(153,000	)		(100,000	)
Accounts Receivable, net	$	527,408		$	426,265

Accounts receivable is derived principally by revenue earned from end-users, which are local and state governmental agencies.  The Company performs periodic credit evaluations of its customers, and does not require collateral. 

Our trade receivables increased by approximately $521,000 principally due to one reseller’s increased sales volume, an increase in the number of customer bookings and a rise in the average dollar value of invoices. At September 30, 2016, the Company had a concentration of credit risk involving a single customer who owes the Company an account balance, a portion of which is past due, equivalent to 36% of the Company’s Accounts Receivable, net. The Company is discussing various payment plans with the customer and believes this matter will be successfully resolved by the end of 2016.

The Company’s other receivables generally consist of miscellaneous receivable activities.

The elimination of the unpaid deferred revenue represents those invoices issued for products and/or services not yet paid by the customer or services completed by the Company.  The elimination is made to prevent the “gross-up” effect on the Company’s balance sheet between accounts receivable and deferred revenues.

The Company’s allowance for doubtful accounts is based upon a review of outstanding receivables.  Delinquent receivables are written-off based on individual credit evaluations and specific circumstances of the customer. 

At September 30, 2016, the $153,000 allowance consisted of a $143,000 specific reserve following a customer specific review of total receivables, and a $10,000 general, or non-specific, allowance, compared to $90,000 specific and $10,000 general allowances at December 31, 2015.  The increase in the specific allowance primarily relates to the past due balance involving the single customer referenced above.  As of December 31, 2015, the Company established a $10,000 general allowance, which is directed towards receivables that are over sixty days of age and may be at risk of collection.