应收账款管理外文文献Word文档格式.docx

1、and establish a credit policy that results in the greatest net profitability. Keywords: accounts receivable, profitability, net savings, credit policy21 sample EKON. MISAO PRAKSA DBK. GOD XXII. （2013.） BR. 1. （21-38） Kontu, E.: MANAGEMENT OF ACCOUNTS. interest revenues including the potential to rec

2、over past sales that remain 3uncollected . Once the decision to grant credit has been made, the firm must establish the terms of the credit. Credit terms are often separated into two parts: the credit period and the credit discount. Collection of accounts receivable is an important process for a cor

3、poration and requires a well-designed and well-implemented policy. One technique is the factoring of accounts receivables. In a typical factoring arrangement, one firm will sell their accounts receivable outright to another firm for an agreed-upon price. There ia usually no recourse in such transact

4、ions, such that the buyer （also known as the factor） takes the loss if the purchaser of the goods does not ultimately pay for them. Another technique to expedite the receipt of accounts receivable is to utilize lock boxes. Lock boxes are payment collection locations spread geographically so as to re

5、duce the amount of time required for checks mailed to the firm to be deposited and cleared. The lock boxes are typically post office box addresses from which deposits go directly to a bank on the day of receipt. The reduction of mailing time and check clearing time for the banks can produce signific

6、ant savings when large sums of money are involved. Payments of accounts receivable should be closely monitored to detect potential problems such as would be indicated by slow payments. Following up on slow-paying customers is an important function of the credit department. Procedures should be caref

7、ully developed and consistently implemented4. The major decision regarding accounts receivable is the determination of the amount and terms of credit to extend to customers. The total amount of accounts receivable is determined by two factors: the volume of credit sales and the average length of tim

8、e between sales and collections. The credit terms offered have a direct bearing on the associated costs and revenue to be generated from receivables. In evaluating a potential customers ability to pay, consideration should be given to the firms integrity, financial soundness, collateral to be pledge

9、d, and current economic conditions. A customers credit soundness may be evaluated through quantitative techniques such as regression analysis. Bad debt losses can be estimated reliably when a company sells to many customers and when its credit policies have not changed for a long period of time. In

10、managing accounts receivable, the following procedures are recommended:establish a credit policy establish a policy concerning billing establish a policy concerning collection. 4Ibidem, p. 520.Ibidem, p. 521-522 .24 The establishment of a credit policy can include the following activities:A detailed

11、 review of a potential customers soundness should be made prior to extending credit. Procedures such as a careful review of the customers financial statements and credit rating, as well as a review of financial service reports are common. As customer financial health changes, credit limit should be

12、revised. Marketing factors must be noted since an excessively restricted credit policy will lead to lost sales. The policy is financially appropriate when the return on the additional sales plus the lowering in inventory costs is greater than the incremental 5cost associated with the additional inve

13、stment in accounts receivable . The following procedures are recommended in establishing a policy concerning billing:Customer statements should be sent within 1 day subsequent to the close of the period. Large sales should be billed immediately. Customers should be invoiced for goods when the order

14、is processed rather than when it is shipped. Billing for services should be done on an interim basis or immediately prior to the actual services. The billing process will be more uniform if cycle billing is employed. The use of seasonal datings should be considered. In establishing a policy concerni

15、ng collection the following procedures should be used:Accounts receivable should be aged in order to identify delinquent and high-risk customers. The aging should be compared to industry norms. Collection efforts should be undertaken at the very first sign of customer 6financial unsoundness . 2.2.Ma

16、naging the credit policyThe success or failure of a business depends primarily on the demand for its products. Shim, J. K., Siegel, J. G.: Financial Management, Third edition, Mc Graw Hill, New York, 2007,p.107-108.Ibidem, p. 108 .25 The major determinants of demand are sales prices, product quality

17、, advertising, and the companys credit policy. The financial manager is responsible for administering the companys credit policy. Receivables management begins with the credit policy. Credit policy consists of four major components: credit standards, credit terms, the credit limit and collection pro

18、cedures. Credit standards refer to the required financial strength of acceptable credit customers. Based on financial analysis and non financial data, the credit analyst determines whether each credit applicant exceeds the credit standard and thus qualifies for credit. Lower credit standards boost s

19、ales, but also increase bad debts. The minimum standards a customer must meet to be extended credit are: character, capital, capacity, conditions and collateral. The credit period, stipulating how long from the invoice the customer has to pay, and the cash discount together comprise the sellers cred

20、it terms. A companys credit terms are usually very similar to that of other companies in its industry7. Discounts given for early payment include the discount percentage and how rapidly payment must be made to qualify for the discount. If credit is extended, the dollar amount that cumulative credit

21、purchases can reach for a given customer constitutes that customers credit limit. The customer periodically pays for credit purchases, freeing up that amount of the credit limit for further orders. The two primary determinants of the amount of a customers credit limit are requirements for the suppli

22、ers products and the ability of the customer to pay its debts. The latter factor is based primarily on the customers recent payment record with the seller and others and a review and analysis of the customers most recent financial statements8. Detailed statements regarding when and how the company w

23、ill carry out collection of past-due accounts make up the companys collection procedures. These policies specify how long the company will wait past the due date to initiate collection efforts, the methods of contact with delinquent customers, and whether and at what point accounts will be referred

24、to an outside collection agency . 9Collection policy is measured by its toughness or laxity in attempting to collect on slow-paying accounts. A tough policy may speed up collections, by it might also anger customers, causing them to take their business elsewhere . 107Maness, T. S., Zietlow, J. T.: S

25、hort-Term Financial Management, Third Edition, Thomson South-Western, Ohio, 2005, p. 139.Ibidem, p. 139 .Ibidem, p. 141 .Brigham, E. F., Daves, P. R.: Intermediate Financial Management, 8th edition, Thomson South-Western, Ohio, 2004., p. 715 .26 A firm may liberalize its credit policy by extanding f

26、ull credit to presently limited credit customers or to non-credit customers. Full credit should be given only if net profitability occurs. A financial manager has to compare the earnings on sales obtained to the added cost of the receivables. The additional earnings represent the contribution margin

27、 on the incremental sales because fixed costs are constant. The additional costs on the additional receivables result from the greater number of bad debts and the opportunity cost of tying up funds in receivables for a longer time period. If a firm considers offering credit to customers with a higher-than-normal risk rating, the profitability on additional sales generated must be compared with the amount of additional bad debts expe