The correct answer is D. All of the above.
Receivables management is the process of managing a company’s accounts receivable. It involves tracking customer payments, ensuring that payments are received on time, and taking action to collect overdue payments.
A cash budget is a financial statement that projects a company’s cash inflows and outflows over a specified period of time. It is used to help a company manage its cash flow and ensure that it has enough cash on hand to meet its obligations.
The economic order quantity (EOQ) is the optimal quantity of goods to order in order to minimize the total costs of ordering and carrying inventory.
An ageing schedule is a report that shows the age of a company’s accounts receivable. It is used to identify customers who are overdue on their payments and to take action to collect those payments.
All of these tools are used in receivables management. A cash budget helps a company to manage its cash flow and ensure that it has enough cash on hand to meet its obligations. The EOQ helps a company to minimize the total costs of ordering and carrying inventory. An ageing schedule helps a company to identify customers who are overdue on their payments and to take action to collect those payments.
Here are some additional details about each of these tools:
- A cash budget is a financial statement that projects a company’s cash inflows and outflows over a specified period of time. It is used to help a company manage its cash flow and ensure that it has enough cash on hand to meet its obligations. To create a cash budget, a company first needs to estimate its expected cash inflows and outflows. Cash inflows can come from sales, investments, and loans. Cash outflows can go to expenses, such as salaries, rent, and utilities, as well as to repay loans. Once a company has estimated its expected cash inflows and outflows, it can use the cash budget to identify any potential cash shortfalls or surpluses. This information can then be used to make adjustments to the company’s operations, such as increasing sales or taking out a loan, in order to ensure that it has enough cash on hand to meet its obligations.
- The economic order quantity (EOQ) is the optimal quantity of goods to order in order to minimize the total costs of ordering and carrying inventory. The EOQ is calculated by taking into account the costs of ordering, carrying inventory, and lost sales. The costs of ordering include the costs of placing the order, such as the cost of postage and the cost of the employee’s time to place the order. The costs of carrying inventory include the cost of the space to store the inventory, the cost of insurance, and the cost of obsolescence. The costs of lost sales include the lost revenue from customers who are not able to purchase the product because it is out of stock. The EOQ is calculated using the following formula:
EOQ = â(2DC/h)
where:
D = annual demand for the product
C = cost of placing an order
h = holding cost per unit per year
Once the EOQ has been calculated, a company can use it to determine the optimal quantity of goods to order each time it places an order. This can help a company to minimize its costs of ordering and carrying inventory.
* An ageing schedule is a report that shows the age of a company’s accounts receivable. It is used to identify customers who are overdue on their payments and to take action to collect those payments. To create an ageing schedule, a company first needs to calculate the age of each account receivable. The age of an account receivable is calculated by taking the date of the invoice and subtracting the date of the payment. Once the age of each account receivable has been calculated, the company can then group the accounts into different age categories, such as 0-30 days, 31-60 days, 61-90 days, and 91+ days. The ageing schedule can then be used to identify customers who are overdue on their payments. Customers who are overdue on their payments can be contacted and asked to make their payments. If a customer does not make their payment, the company may need to take further action, such as sending a collection letter or hiring a collection agency.