MANAGEMENT OF ACCOUNTS RECEIVABLEIN A COMPANY外文翻译原文.docx
- 文档编号:25221316
- 上传时间:2023-06-06
- 格式:DOCX
- 页数:42
- 大小:40.79KB
MANAGEMENT OF ACCOUNTS RECEIVABLEIN A COMPANY外文翻译原文.docx
《MANAGEMENT OF ACCOUNTS RECEIVABLEIN A COMPANY外文翻译原文.docx》由会员分享,可在线阅读,更多相关《MANAGEMENT OF ACCOUNTS RECEIVABLEIN A COMPANY外文翻译原文.docx(42页珍藏版)》请在冰豆网上搜索。
MANAGEMENTOFACCOUNTSRECEIVABLEINACOMPANY外文翻译原文
MANAGEMENTOFACCOUNTSRECEIVABLEINACOMPANY
Abstract
Accountsreceivablemanagementdirectlyimpactstheprofitabilityofacompany.
Firstly,thepurposeoftheempiricalpartofthestudyistoanalyzeaccounts
receivableandtodemonstrateacorrelationbetweentheaccountsreceivablelevel
andprofitabilityexpressedintermsofRetunonAssets(ROA)of
companies.Secondly,theaimoftheoreticalresearchistoexplorecostand
benefitsofchangesincreditpolicy,determinetheindependentvariableswhich
haveanimpactonnetsavingsandestablisharelationshipamongtheminorder
todevelopanewmathematicalmodelforcalculatingnetsavingsfollowinga
revisionofcreditpolicy.Onthebasisofresearchresult,amathematicalmodelfor
calculatingnetsavingsandfollowingarevisionofcreditpolicy,hasbeen
developedandwiththismodelacompanycanconsiderdifferentcreditpoliciesas
wellaschangesincreditpolicyinordertoimproveitsincomeandprofitability
andestablishacreditpolicythatresultsinthegreatestnetprofitability.
Keywords:
accountsreceivable,profitability,netsavings,creditpolicy
21
sample
EKON.MISAOPRAKSADBK.GODXXII.(2013.)BR.1.(21-38)Kontuš,E.:
MANAGEMENTOFACCOUNTS...
1.
INTRODUCTION
Accountsreceivableisthemoneyowedtoacompanyasaresultof
havingsolditsproductstocustomersoncredit.Theprimarydeterminantsofthe
company'sinvestmentinaccountsreceivablearetheindustry,theleveloftotal
salesalongwiththecompany'screditandthecollectionpolicies.
Accountsreceivablemanagementincludesestablishingacreditand
collectionspolicy.
Creditpolicyconsistsoffourvariables:
creditperiod,discountsgivenfor
earlypayment,creditstandardsandcollectionpolicy.Thethreeprimaryissuesin
accountsreceivablemanagementaretowhomcreditshouldbeextended,theterms
ofthecreditandtheprocedurethatshouldbeusedtocollectthemoney.
Themajordecisionregardingaccountsreceivableisthedeterminationof
theamountandtermsofcredittoextendtocustomers.Thetotalamountof
accountsreceivableoutstandingatanygiventimeisdeterminedbytwofactors:
thevolumeofcreditsalesandtheaveragelengthoftimebetweensalesand
collections.Thecredittermsofferedhaveadirectbearingontheassociatedcosts
andrevenuetobegeneratedfromreceivables.Ifcredittermsaretight,therewill
belessofaninvestmentinaccountsreceivableandfewerbaddebtlosses,butthere
willalsobelowersalesandreducedprofits.
Wehypothesizethatbyapplyingscientifically-basedaccountsreceivable
managementandbyestablishingacreditpolicythatresultsinthehighestnet
earnings,companiescanearnasatisfactoryprofitaswellasareturnoninvestment.
Thepurposeofthisstudyistodeterminewaysoffindinganoptimal
accountsreceivablelevelalongwithmakingoptimumuseofdifferentcredit
policiesinordertoachieveamaximumreturnatanacceptablelevelofrisk.In
strivingtofillinthegapsrelatingtonetsavingsfromchangesincreditpolicy,
thestudymakesitsowncontributiontoresearchandtherebytomanagersby
givingthemgeneralrecommendation.Withtheaimofcompletingthesegaps,the
studywillinvestigateaccountsreceivables,theirmanagementandexplorecosts
andbenefitsfromchangesincreditpolicyaswellasnetprofitability.
Whenacompanyisconsideringchangesinitscreditpolicyinorderto
improveitsincome,incrementalprofitabilitymustbecomparedwiththecostof
discountandtheopportunitycostassociatedwithhigherinvestmentinaccounts
receivable.
Theoutcomerepresentsanewmathematicalmodelforcalculatingnet
savingsfromchangesincreditpolicyandwiththismodelacompanycanconsider
differentcreditpoliciesaswellaschangesincreditpolicyinordertoimproveits
incomeandprofitability.
22
EKON.MISAOPRAKSADBK.GODXXII.(2013.)BR.1.(21-38)Kontuš,E.:
MANAGEMENTOFACCOUNTS...
2.
LITERATUREREVIEW
2.1.
Accountsreceivablemanagement
Accountsreceivablerepresentsasizablepercentageofmostfirms'assets.
Investmentsinaccountsreceivable,particularlyformanufacturingcompanies,
representasignificantpartofshort-termfinancialmanagement.Firmstypically
sellgoodsandservicesonbothcashandacreditbasis.Firmswouldrathersellfor
cashthanoncredit,butcompetitivepressuresforcemostfirmstooffercredit.The
extensionoftradecreditleadstotheestablishmentofaccountsreceivable.
Receivablesrepresentcreditsalesthathavenotbeencollected.Asthecustomers
paytheseaccounts,thefirmreceivesthecashassociatedwiththeoriginalsale.If
thecustomerdoesnotpayanaccount,abaddebtlossisincurred
1
.
Whenacreditsaleismade,thefollowingeventsoccur:
inventoriesare
reducedbythecostofgoodssold,accountsreceivableareincreasedbythesales
price,andthedifferenceisprofit,whichisaddedtoretainedearnings.Ifthesaleis
forcash,thenthecashfromthesalehasactuallybeenreceivedbythefirm,butif
thesaleisoncredit,thefirmwillnotreceivethecashfromthesaleunlessand
untiltheaccountiscollected.Carryingreceivablehasbothdirectandindirect
costs,butitalsohasanimportantbenefit-increasedsales.
AccordingtoChambersandLaceytherearethreeprimaryissuesinthe
2
managementofaccountsreceivable:
towhomtoextendcredit,whatthetermsof
thecreditshouldbe,andwhatprocedureshouldbeusedtocollectthemoney.
Extendingcreditshouldbebaseduponacomparisonofcostsandbenefits.The
analysismustbuildinuncertaintybecauseweareuncertainoffuturepayment,and
wewillhandlethisbycomputingtheexpectedcostsandexpectedbenefitsthrough
paymentprobabilities.Thepotentialcostofextendingcreditisthatthecustomer
willnotpay.Althoughthereisatemptationtocomputethiscostasthefullpriceof
theproduct,itisalmostalwaysmoreappropriatetousetheactualcostofthe
product.Thepotentialbenefitofextendingcreditisnotjustthehopeforprofiton
theonetransaction;rather,itisthepotentialvalueofthecustomerforalong-term
relationship.
Thedecisionofhowmuchcredittooffermustbemadewhenthe
customerinitiallyrequestscreditandwhenthecustomerrequestsadditionalcredit.
Thefundamentalprinciplethatguidesfinancialdecisionscanbeused:
marginal
benefitversusmarginalcost.Themarginalcostistheadditionalpotentiallostcosts
oftheproduct.Thecostsofpastuncollectedsalesaresunkcostsandshouldnotbe
includedasamarginalcosts.Themarginalbenefitsarethepotentialsalesand
1
2
Pinches,G.:
FinancialManagement,HarperCollinsCollegePublishers,NewYork,1994.,p.701-702.
Chambers,D.R.,Lacey,N.L.:
ModernCorporateFinance,HaydenMcNeilPublishing,Michigan,
2011,p.518.
23
EKON.MISAOPRAKSADBK.GODXXII.(2013.)BR.1.(21-38)Kontuš,E.:
MANAGEMENTOFACCOUNTS...
interestrevenues–includingthepotentialtorecoverpastsalesthatremain
3
uncollected.
Oncethedecisiontograntcredithasbeenmade,thefirmmustestablish
thetermsofthecredit.Credittermsareoftenseparatedintotwoparts:
thecredit
periodandthecreditdiscount.
Collectionofaccountsreceivableisanimportantprocessfora
corporationandrequiresawell-designedandwell-implementedpolicy.One
techniqueisthefactoringofaccountsreceivables.Inatypicalfactoring
arrangement,onefirmwillselltheiraccountsreceivableoutrighttoanotherfirm
foranagreed-uponprice.Thereiausuallynorecourseinsuchtransactions,such
thatthebuyer(alsoknownasthefactor)takesthelossifthepurchaserofthe
goodsdoesnotultimatelypayforthem.
Anothertechniquetoexpeditethereceiptofaccountsreceivableisto
utilizelockboxes.Lockboxesarepaymentcollectionlocationsspread
geographicallysoastoreducetheamountoftimerequiredforchecksmailedto
thefirmtobedepositedandcleared.Thelockboxesaretypicallypostofficebox
addressesfromwhichdepositsgodirectlytoabankonthedayofreceipt.The
reductionofmailingtimeandcheckclearingtimeforthebankscanproduce
significantsavingswhenlargesumsofmoneyareinvolved.
Paymentsofaccountsreceivableshouldbecloselymonitoredtodetect
potentialproblemssuchaswouldbeindicatedbyslowpayments.Followingup
onslow-payingcustomersisanimportantfunctionofthecreditdepartment.
Proceduresshouldbecarefullydevelopedandconsistentlyimplemented4.
Themajordecisionregardingaccountsreceivableisthedeterminationof
theamountandtermsofcredittoextendtocustomers.Thetotalamountof
accountsreceivableisdeterminedbytwofactors:
thevolumeofcreditsalesand
theaveragelengthoftimebetweensalesandcollections.Thecredittermsoffered
haveadirectbearingontheassociatedcostsandrevenuetobegeneratedfrom
receivables.
Inevaluatingapotentialcustomer’sabilitytopay,considerationshould
begiventothefirm’sintegrity,financialsoundness,collateraltobepledged,and
currenteconomicconditions.Acustomer’screditsoundnessmaybeevaluated
throughquantitativetechniquessuchasregressionanalysis.Baddebtlossescanbe
estimatedreliablywhenacompanysellstomanycustomersandwhenitscredit
policieshavenotchangedforalongperiodoftime.Inmanagingaccounts
receivable,thefollowingproceduresarerecommended:
•
•
•
establishacreditpolicy
establishapolicyconcerning
- 配套讲稿:
如PPT文件的首页显示word图标,表示该PPT已包含配套word讲稿。双击word图标可打开word文档。
- 特殊限制:
部分文档作品中含有的国旗、国徽等图片,仅作为作品整体效果示例展示,禁止商用。设计者仅对作品中独创性部分享有著作权。
- 关 键 词:
- MANAGEMENT OF ACCOUNTS RECEIVABLE IN COMPANY外文翻译原文 COMPANY 外文 翻译 原文
链接地址:https://www.bdocx.com/doc/25221316.html