2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
The smooth operation of an organization is based on the rational planning of its goals, strategy, policies, as well as on the control of the internal and external environment of the enterprise. In addition, it is very important to consider the prospects for the development of the organization and its further functioning in the market.
For many organizations, accounts receivable is one of the ways to increase the number of sales and, consequently, their competitiveness. But in order for this not to be a loss of money and, at the same time, products and services, the company must exercise effective control over debt obligations.
Managing an organization's accounts receivable is planning the organization's prospects and its marketing policy to increase sales of products or services rendered, as well as avoiding unforeseen delays in funds from counterparties.
Effective receivables management includes the following components:
• Availability of reliable information on the solvency of counterparties;
• analysis and evaluation of debtors andtheir credit history;
• analysis of the movement of both accounts payable and accounts receivable of the organization, as well as their ratio to determine the financial stability of the enterprise;
• development of methods for the speedy collection of debts and the reduction of defaulting debtors.
Analysis and management of receivables allows you to see the weaknesses of the organization, evaluate the effectiveness of its credit policy, and also predict the flow of future funds to the company's account.
Control over debt obligations is impossible without a clearly formulated and structured regulation on cooperation with counterparties, which should reflect the strict rules for conducting a commercial transaction, as well as the procedure for paying receivables.
In addition, the rational management of accounts receivable is based on the organized work of departments, which should also be indicated in the regulations (which departments they are, what they are responsible for and how they interact with each other). All this information can be included in the organization's credit policy, which is developed for the financial year.
To implement the credit policy of the organization in terms of receivables, the following rules should be followed:
• keeping records of orders and their due dates by counterparties;
• introduction of benefits and bonuses for early repayment of the loan;
• analysis of goods (services) notclaimed by debtors;
• Determining the maximum amount of receivables for the entire organization, as well as for individual counterparties (taking into account the period of cooperation, the form of ownership of the debtor, etc.);
• Gradual introduction of factoring to accelerate the turnover of capital, as well as guaranteed compensation of funds.
Thus, the management of receivables is an important aspect in the economic activity of the enterprise. With its effective management, the organization achieves financial stability, stable growth and increased competitiveness.
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