Receivable Management

Course : Managerial Finance Lecture : Marc Credit Hours : 3 Credits Semester Sessions : 3 Semester, 2021/2022 Session Prepared By : Kenzo LECTURE NOTES RECEIVABLE MANAGEMENT Receivables are company assets or wealth arising as a result of credit sales. This credit policy is a policy that is usually implemented company in stimulating customer interest. This credit policy/sale could pose a risk for companies with partial or even uncollectibility perhaps the entire receivable. But even so, credit sales are possible generate benefits in the form of: a. Increase in sales results. b. Increase in profits. c. Winning in competition. Factors that need to be considered in determining The credit policy is as follows: 1. Standard Credit Credit standards set by the company is a benchmark in determining the level of risk optimally can be borne by the company on credit jams/uncollectibles that may arise as a result of giving credit. To establish optimal credit standards it is necessary assign or group subscriptions on a tier basis creditworthiness and can be done using the 5 C concept of credit assessment, namely Character, Capacity, Capital, Collateral, and Conditions. a. Character Assess the level of moral awareness of internal customers meeting its financial obligations, is a factor that The most important thing in analyzing credit worthiness subscriber. b. Capacity Examining the subscription's ability to pay his obligations on time according to schedule, this is a factor that needs to be done before credit given. c. Capital Pay attention to the amount of capital owned by subscription is necessary to consider the amount of risk that must be borne by the credit provider compared to the risk borne by subscriber. In this case, what needs to be researched is the amount of capital own subscription, thus the credit giver can estimate the amount of credit limit that can be given to the subscription. d. Collateral Consider whether or not there is a guarantee of use supports the credit given, in order to provide something guarantee against the possibility of subscription failure to pay all debts/credits from the results of its operations or business. e. Conditions Analyze general economic conditions and conditions industry from subscriptions, in order to assess the impact of the situation economic impact on subscription capabilities pay the debt. To apply the 5 C concept above, data is needed accurate and reliable subscription data in the process assessment of credit worthiness. These data, such as past experiences is one of the important factors to use as a benchmark in assessing credit worthiness in the future future, in addition to financial report analysis as a tool assess the company's financial condition over time. Then information from third parties is also very important important, especially for new subscriptions, this can be This is done by looking for information about subscriptions These are from relationships that have been in contact with for a long time the subscription. 2. Credit Terms/Credit Conditions. In these credit terms, the term must be specified credit period, which is given to subscription and how much cash discount is given in case the subscription pays faster or before maturity. A credit term written as 2/15 net 45, this means the subscription is given 45 days credit, but if The subscription pays no later than 15 days after invoice/invoice date, you will get a cash discount of 2% of the value stated in the invoice/invoice.