Account Receivable Management

1. Transcript for the
Receivables Management
Lecture

2. Where The Money Gets Stuck

3. • The term Receivables
refers to debt owned to the
firm by the customers
resulting from the sale of
goods or services in the
ordinary course of
business. There are the
funds blocked due to credit
sales
• Receivables management
refers to the decision a
business makes regarding
to the overall credit,
collection policies and the
evaluation of individual
credit applicants
• Receivables Management
is also called trade credit
management

4. When the sale is made but the money is not received for it
or in other words when the company make a "CREDIT" Sale
Receivable Gets Created

5. — “Any fool can lend, but it takes
a lot of skill to get it back”

6. Cash or Credit?
Every business would like to sell and get the money immediately or in other words, the business
would prefer to have only CASH sales

7. Why Credit Sales?????
Increased
Sales
Market Share
Increased
Increase
in Profit
When the firm is able to
retain old customers and
attracting new customers
automatically market
share will increased
Providing goods or
services on credit
expands sales, by
retaining old customers
and attracting new
customers
Increased sales, leads
to an increased profit

8. Cost Maintaining Receivables
Collection
Costs
Capital Cost /
Cost of
Financing
Delinquency
Costs
Default Costs

9. Thank you