Accounts receivable - is the sum of the obligations of other organizations to the company.Most of these relationships arise in cases where the company takes on the implementation of products and payments to suppliers made upon sale.This operation is reflected in the balance sheet in the second part of the asset.
Receivables - is transferred to the implementation of the goods sold or for which has not yet returned the money.Turnover ratios of debt can be said about the financial situation of the company, about its stability.The higher revenues from sales of products, the more profit organization operates.
Concept and receivables include receivables for services, goods and works in cases where the supplier took an advance, or if, before the expiry of the payment occurred change of ownership.There is also the concept of "overdue receivables."This is when the debt was formed as a result of breach of contract.
In terms of performance receivables divided into short and long term.
Any company should be able to control this value.For its effective use can increase the profit of the organization.
According to statistics, one fifth of the assets of a standard industrial organization of receivables.This suggests that the management of this tool is an important part of the policy of the company in the field of finance.The objective of debt management is to accelerate the receipt of money from the customer, reducing the debt on which payments are uncertain or can not do, effective interventions for the sales and promotion of goods on the market.
The magnitude of the debt is affected by the following factors:
sales volume and in the amount of the share component of the implementation.The higher the sale, the more generally receivable.
Terms of settlements with customers and suppliers.A more favorable terms offered to buyers is higher receivables.This is a result of lower requirements to determine the reliability of the debtor, increasing maturity.
debt collection policy.With more active debt collection companies reduce the balance of receivables and improved its quality.
on this value also affects the payment discipline of clients.
receivables management system can be divided into two parts: the policy of the company, allowing the use of debt to increase sales (provision of deferred payment for other things being equal, would be more beneficial to the consumer).The second is a set of measures aimed at reducing the risk of overdue or bad debts.
Receivables: definition and instruments to reduce
most effective mechanism to maximize cash flow and reduce the risk of the debt, the organization advocates a system of fines and discounts.Accrual of penalties for violations of the due date shall be provided by the contract.Depending on the timing of payment for the goods, you can get a discount.For example, at one hundred percent prepayment discount can be applied 4% upon shipment - 1%, with deferred payment discount is not available.
obligatory part of the management becomes the motivation of employees to reduce receivables.For example, a sales manager bonus is carried out not only for the implementation of the plan for the sale of products, but also for the fulfillment of obligations clients get the goods with deferred payment.
