Accounts receivable are what every entrepreneur should remember

The receivable is the amountobligations of other organizations to the company. Most often, such relationships arise in cases where the enterprise takes on the sale of products, and the calculation with the supplier produces after the sale. This transaction is reflected in the balance sheet in the second part of the asset.

Accounts receivable are those transferred tosale or sold goods for which money has not yet been returned. Indicators of debt turnover can tell about the financial situation of the enterprise, its stability. The higher the revenue from the sale of products, the more profit the organization works.

The concept and types of receivables includeindebtedness for services, goods and work in cases where the supplier took an advance, or if the transfer of ownership occurred before the end of the payment term. There is also the concept of "overdue accounts receivable". This is when the debt was formed as a result of violation of the terms of the contract.

According to the terms of performance of obligations receivables are divided into short-term and long-term.

Any enterprise should be able to manage this value. After all, its effective use makes it possible to increase the profit of the organization.

According to statistics, a fifth of the assets of the standardproduction organization accounts receivable. This suggests that the management of this tool is an important part of the firm's financial policy. The task of debt management is to accelerate the receipt of money from the clientele, reduce the debts for which payments are doubtful or may not arrive, the implementation of effective measures for the sale and promotion of goods on the market.

The amount of debt is influenced by the following factors:

Sales volume and component in the volume of sales. The higher the sale, the more, as a rule, the debt.

Terms of settlements with customers and suppliers. Under more favorable terms, given to buyers, receivables become higher. This occurs as a result of lower requirements for determining the reliability of the debtor, increasing the maturity.

Debt collection policy. With a greater activity of the debt collector, the balances of accounts receivable are reduced and its quality is increased.

This amount is also affected by the payment discipline of customers.

Receivables management systemcan be conditionally divided into two blocks: the company's policy allowing the use of debt to increase sales (granting a deferred payment under other equal conditions will be more beneficial to the consumer). The second will be a set of measures that are aimed at reducing the risk of overdue or bad debts.

Accounts receivable: identification and instruments to reduce

The most effective mechanism formaximize cash flow and reduce the risk of debt, is the organization of a system of fines and discounts. Charging penalties for violations of the payment deadline should be provided for in the contract. Depending on the terms of payment for the goods you can provide discounts. For example, with a 100% prepayment, a 4% discount can be applied, upon the fact of shipment - 1%, with a deferred payment a discount is not provided.

The mandatory part of the management becomesmotivation of employees in reducing receivables. For example, the sales manager is rewarded not only for the implementation of the plan for the sale of products, but also for the fulfillment of obligations by customers who received the goods with a deferred payment.

</ p></ p>>