Analysis of accounts receivable of some companies and its causes

The analysis of accounts receivable of various companies, enterprises and other economic 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 typical for companies that are not strong enough financially, and their goods or services are not among 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.

Let's start with the existence of the so-called normal receivables. The emergence of such debt is inevitable in connection with the existence of a certain time interval between the shipment of goods and 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 indicated in the relevant agreement between them. It is also possible 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 relevant agreements.

Carrying out an analysis of accounts receivable of an economic entity, naturally, they are also considering clients, because of which it arises. In general, customers of any company can be divided into two groups: bona fide clients and unscrupulous.

The first group includes customers who, concluding a contract for the supply of any goods or services, had a clear intention to fulfill the terms of this agreement, that is, in time to pay for the received goods or the service provided.

The other group includes customers who, when concluding a relevant agreement, did not expect its implementation (or reliably knew that it could not be performed) in terms of paying for the goods received or services provided, or seeking 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 may find themselves in a group of unscrupulous companies due to economic circumstances that are independent of them.

However, as the same analysis of accounts receivable shows, the division of clients into such "extreme" groups as conscientious and unfair is also purely conditional and is conducted only to facilitate debt management. There are always customers, and such a majority, which can be attributed to the intermediate group. Such customers, seeking for their own benefit in the form of possible loans 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 for significant 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 customers do not allow themselves such relationships with supplier companies, on which the existence of their business directly depends, as well as with business partners, who in any circumstances resolutely demand and achieve clear fulfillment of all contractual obligations, using all envisaged Sanctions agreements.