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Presentation On Introduction To Receivables Management: Presented By: Rumeet Kaur MBA-3 SEM

Receivables represent amounts owed to a firm from credit sales. Maintaining receivables involves collection costs, capital costs if additional funding is required, delinquency costs if customers are late paying, and default costs from uncollectible debts. Effective receivables management aims to balance the costs and benefits of credit policies by facilitating sales while minimizing bad debts and ensuring adequate cash flow. Key factors that impact the size of receivables include credit sales levels, collection policies, and customer payment habits.

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155 views

Presentation On Introduction To Receivables Management: Presented By: Rumeet Kaur MBA-3 SEM

Receivables represent amounts owed to a firm from credit sales. Maintaining receivables involves collection costs, capital costs if additional funding is required, delinquency costs if customers are late paying, and default costs from uncollectible debts. Effective receivables management aims to balance the costs and benefits of credit policies by facilitating sales while minimizing bad debts and ensuring adequate cash flow. Key factors that impact the size of receivables include credit sales levels, collection policies, and customer payment habits.

Uploaded by

rumeetkaur
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© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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PRESENTATION ON INTRODUCTION TO RECEIVABLES MANAGEMENT

PRESENTED BY: RUMEET KAUR MBA- 3RD SEM

MEANING OF RECEIVABLES:
Receivables represent amounts owed to the firm as a result of sale of goods or services in the ordinary course of business. These are claims of the firm against its customers and form part of its current assets. Receivables are also known as accounts receivables, trade receivable or book debts.

COST OF MAINTAINING RECEIVABLES:


COLLECTION COST: These are those costs that are incurred by a firm for collecting the amount from the customers on account of credit sales.

CAPITAL COST: These are those costs that are incurred by a firm on account of raising additional capital to support credit sales, the capital which alternatively could be earned profitably employed elsewhere.

DELINQUENCY COST:
These are the additional cost over the normal administrative cost of maintaining and collection of receivables. If there is any delay in payment by a customer then the firm have to incur cost on phone calls, postage, legal notices etc.

DEFAULT COST:
If the customer has made a default & the receivables become partly or wholly unrealizable then this amount is known as bad debt.

BENEFITS OF ACCOUNT RECEIVABLES:


Helps to increase growth of sales. Helps in increasing the operating profits. Meet out competitions. Attract new customers. Helps in minimizing the bad debts. It ensures higher investment in debtors.

RECEIVABLES MANAGEMENT :
Receivable management is the process of making decisions relating to investment in trade debtors. It is also defined as collection of steps and procedures required to properly weigh the costs and benefits attached with the credit policies.

OBJECTIVES:
To ensure the adequate flow of cash To facilitate liberal credit transactions. To promote international trade transactions. To create a written proof about debt obligations. To create additional source of finance. To ensure credit worthiness of the concern. To take maximum benefit of trade or cash discount facilities. To achieve goals or objectives of the organisation.

FACTORS AFFECTING THE SIZE OF RECEIVABLES:


Size of credit sales Credit policies Terns of trade Profits Credit collection policies Expansion plans Habits of customers

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