Receivables include Debtors and Bills Receivables. Increase in Receivables ( more credit period) will lead to increase in sales and profits but it will also lead to increase in risk of bad debts.
Receivables Management—Definition
Management of debtors and bills receivables involves determining the appropriate credit period extended to debtors in such a manner that sales are maximized and yet minimum funds are blocked in debtors and bad debts are minimized.
Importance of Receivables Management
Right receivables management leads to following benefits :
a) Increase in sales
b) Minimum funds blocked in receivables/Capital Cost
c) Tight recovery system/ controlled delinquency cost
d) Minimum bad debts/default cost
e) Minimum Collection Cost
Its associated with A/cs. Receivables
1) Collection Costs—exp. of admn., collecting credit info.
2) Capital Cost—Cost of Funds blocked in Receivables
3) Delinquency Cost—Legal charges addnl. Collection costs
4) Default Cost—Bad Debts
please sir post some techinques to do financial management sums of all chapters
Yes sure. You can keep checking http://www.bms.co.in/category/bms-gyan/exam-fundas/