Receivables management is the process of tracking and collecting payments from customers. It involves identifying and managing accounts receivable, which are the amounts owed to a company by its customers. Receivables management is important because it helps to ensure that companies are paid for the goods and services they provide.
There are a number of different aspects to receivables management. One important aspect is credit management, which involves assessing the creditworthiness of customers and setting appropriate credit limits. Another important aspect is collections, which involves following up with customers who have not paid their invoices.
Receivables management can be a complex and time-consuming process. However, it is an essential part of running a successful business. By effectively managing their receivables, companies can improve their cash flow and reduce their risk of non-payment.
Here is a brief explanation of each option:
- A. Receipts of raw materials: This is not related to receivables management. Receivables management is about managing accounts receivable, which are the amounts owed to a company by its customers. Receipts of raw materials are about the company receiving the materials it needs to produce its goods or services.
- B. Debtors collection: This is the correct answer. Debtors collection is the process of following up with customers who have not paid their invoices. It is an important part of receivables management.
- C. Creditors management: This is not related to receivables management. Creditors management is about managing the company’s debts. Receivables management is about managing the company’s receivables.
- D. Inventory management: This is not related to receivables management. Inventory management is about managing the company’s inventory. Receivables management is about managing the company’s receivables.