Instruction
1
To improve the financial sustainability clearly monitor and manage accounts receivable, follow its quality and value. The breach of contractual obligations of the company and late payment of goods sold lead to loss of reputation and ultimately to its illiquidity and insolvency. For effective accounts receivable management should:
- monitor the payment discipline of customers;
- focus on a greater number of buyers to reduce the risk of non-payment by one or more of them;
- to monitor the ratio of receivables and payables.
- monitor the payment discipline of customers;
- focus on a greater number of buyers to reduce the risk of non-payment by one or more of them;
- to monitor the ratio of receivables and payables.
2
To accelerate the turnover of receivables and ensure timely payments grant discounts to debtors for the reduction of maturities, use of bills of exchange in accounts receivable, factoring, use trade credit in relations with buyers.
3
To promote financial stability, create a reserve for bad debts. It represents receivables of the organization which are not redeemed in the terms established by the contract and not secured the necessary guarantees. The provision will save on the amount of income tax, it softens the negative impact of bad debts, but not eliminate them.
4
Another option to improve the financial stability is the increase in the equity capital of the company, for example, through the issuance of securities and the reinvestment of profits. When deciding on the borrowed sources, it is necessary to assess the current liabilities structure. The high share of borrowed sources can do to bring in new funds a threat to financial stability.