Analysis of accounts receivable of some companies and its causes
Analysis of accounts receivable of variouscompanies, enterprises and other business entities testifies that it does not arise by itself. Such debts, in particular, can arise in cases when the company has sold the goods or the service is provided, and payment for this product or service has not been received.
The emergence of problems of this kind is characteristic ofcompanies that are not strong enough in the financial plan, and their goods or services are not the most necessary. Audit receivables of such companies shows that one of the ways to reduce it is to pre-examine potential customers and develop a more effective system of relations with them. Let's consider some issues related to the origination of receivables.
We begin with the existence of the so-called normalaccounts receivable. The emergence of such debt is inevitable in connection with the existence of a certain time interval between the shipment of goods and its payment in cases, of course, if the goods are not released after full prepayment. The return of the receivable (normal) by the buyer to the seller occurs in the terms specified in the relevant agreement between them. Perhaps the emergence of overdue accounts receivable, which occurs in cases when the buyer does not fulfill the temporary parameters of the contract, that is, the elementary delay in payment for the goods by the buyer. There is, unfortunately, also a bad debt receivable. It occurs in circumstances in which the company does not have practical chances or resources to return the funds allocated to it under the respective contracts.
Carrying out an analysis of receivablesof an economic subject, naturally, they also consider the clients, because of which it arises. In general, the clients of any company can be divided into two groups: bona fide clients and unscrupulous ones.
The first group includes customers who,entering into a contract for the supply of any goods or services, had a clear intention to fulfill the terms of this contract, that is, in time to pay for the received goods or the service provided.
The other group includes customers who, whenconclusion of the relevant agreement and did not expect its implementation (or reliably knew about the impossibility of its implementation) in terms of payment for the received goods or services provided, or are looking for all possible ways to avoid contractual payments. Unfortunately, in a crisis, such a division of clients into groups is very conditional, as some honest clients can be in the group of unscrupulous in connection with economic circumstances independent of them.
However, as the same analysis of the accounts receivabledebt, the division of clients into such "extreme" groups, as conscientious and unfair, is also purely conditional and is conducted only to facilitate the management of arrears. There are always customers, and such a majority, which can be attributed to the intermediate group. Such customers, seeking for themselves the benefit in the form of possible lending at the expense of the supplier company, deliberately do not rush to pay for the received goods or services provided that the terms of the relevant agreement do not provide solid penalties for late payments or such penalties do not have a serious impact on their financial position. At the same time, many clients use crisis phenomena in the economy as an excuse to justify the non-fulfillment of contract terms.
As analysis of accounts receivable shows,such clients do not allow themselves such relationships with the supplier companies on which the existence of their business directly depends, as well as with business partners who in all circumstances resolutely demand and achieve clear fulfillment of all contractual obligations using all the sanctions provided for by the treaties.