ACCOUNTS RECEIVABLE

Accounts receivable, net, consists of the following at December 31:



	2014	2013
Accounts receivable	$10,253,663	$11,714,813
Allowance for doubtful accounts	(316,715)	—
Accounts receivable, net	$9,936,948	$11,714,813

Accounts receivable represents amounts due from customers. Accounts receivable are recorded at invoiced amounts, net of reserves and allowances, and do not bear interest. The Company uses its best estimate to determine the required allowance for doubtful accounts based on a variety of factors, including the length of time receivables are past due, economic trends and conditions affecting its customer base, significant one-time events and historical write-off experience. Specific provisions are recorded for individual receivables when we become aware of a customer’s inability to meet its financial obligations. The Company reviews the adequacy of its reserves and allowances quarterly.

Receivable balances greater than 30 days past due are individually reviewed for collectability and if deemed uncollectible, are charged off against the allowance accounts after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any significant off balance sheet credit exposure related to its customers.

Related party accounts receivable, net, consists of the following at December 31:



	2014	2013
Accounts receivable, related party	$4,846,452	$—
Allowance for doubtful accounts	(1,696,452)	—
Accounts receivable, net - related party	$3,150,000	$—

Accounts receivable from related parties represents amounts due from Omega Holdings, LLC. Of the total related party receivable balance, $1,696,452 represents invoiced amounts that do not bear interest as of December 31, 2014. Based on management's assessment, the company recognized an allowance of $1,696,452 related to the receivable. The write off was necessary because the Company's receivable was unsecured and the amount that the Company may ultimately recover, if any, is not presently determinable.

As of December 31, 2014, $3,150,000 of the related party receivable balance represents short-term loans and carries an interest rate of 9.5%. No accrued interest is included in the balance. The amount is collateralized by insurance proceeds expected to be collected during in 2015.