Project on Accounts Receivable Management

Description:

Introduction

A project on accounts receivable management focuses on how businesses manage money owed by customers for goods and services sold on credit. Many Indian companies face financial problems not because they lack profits, but because they do not manage their working capital properly. Efficient management of accounts receivable helps companies maintain smooth cash flow and avoid financial stress.

Accounts receivable means the amount of money customers owe to a company after purchasing goods or services on credit. It is treated as a current asset because it is expected to be collected within a short period, usually within one year. Proper receivable management ensures that payments are collected on time and bad debts are minimized.

If a company earns good profits but does not receive payments on time, it may face a cash shortage. Therefore, managing credit sales, monitoring collection periods, and maintaining a proper credit policy are very important. Techniques such as accounts receivable turnover analysis and invoice management help improve liquidity.

Scope of the Study

• To analyze the overall receivable management system of the organization.
• To study the operational efficiency and suggest better use of resources.
• To examine the credit policy and average collection period.
• To suggest ways to minimize investment in accounts receivable.
• To improve firm value and control the cost of trade credit.