RECEVIBLE MANAGEMENT

By:REENA HOODA

Trade Credit

Receivable

Goods sold on credit

Cash receive

in future

Receivable

Risk

Cash receive in

future

Economy Value

REASON FOR

GRANT CREDIT

COMPITITON

MARKETING TOOL

BUYERS REQUIREMENT

RELATIONSHIP WITH DEALERS

BENEFITS

COST

BENEFITSPROFIT

SALES

Default cost

Delinquency cost

Capital

cost

Collection cost

Credit Standard

Credit Analysis

CREDIT POLICIES DIMENSIONS

Credit Standard

Tight Liberal

Collection Cost

Average Collection Period

Bad Debt Expenses

Sales Volume

Factors

EFFECT OF RELAXATION STANADARDS

ITEM Direction of change (increase = I DECREASE

= D)

Effect on profit (positive +

and negative - )

Sales Volume I(D) +( -)

Average Collection Period

I(D) -(+)

Bad Debt I(D) -(+)

Credit investigation processObtaining credit informationAnalysis credit information

Credit information

External

Trade references

Bank references

Internal

Past record and

references

Analysis of credit

informatio

n

• Quantitative

• Qualitative

Credit Terms

Credit period

Cash discount

Cash discount period

ITEM Direction Of Change (I= increase , D= Decrease)

Effect on profit

(Positive + or negative -)

Sales volume I +Average collection period

D +

Bad debt expenses

D +Profit per unit

D _

Effects of increase in cash discount

Collection period

Degree of collection efforts

Types of collection

efforts