Accounts Receivable by Abdiansyah Prahasto.pptx

Abdiansyah Prahasto sharing about Accounts Receivable Management to FISIP Unpad Business Administration international class students.

1. Short-Term Financing: Accounts Receivable Management Abdiansyah Prahasto, MBA, CIA FISIP | Universitas Padjadjaran Semester Ganjil 2025/2026

2. Determining Credit Policy

3. Four Pillars of Credit Policy Credit Period Discounts Credit Standards Collection Policy time given to customers to pay price reduction for early payment minimum financial strength required for credit strictness in enforcing credit terms

4. Five C’s of Credit Character applicants’ record of meeting past obligations Capacity ability to repay based on cash flow Capital debt relative to equity Conditions economics and industry factors affecting repayment Collateral assets available to secure credit 05 01 02 03 04

5. Relaxation of Credit Standards Variable Direction of change Effect on profits Sales volume Increase Positive Investment in account receivable Increase Negative Bad-debt expenses Increase Negative

6. Consideration Before Relaxing Credit Additional Profit Contribution from sales Cost of marginal investment in accounts receivable Cost of marginal bad debts

7. International Credit Challenges No Challenge Solution/Impact 1 Currency fluctuations Hedging (futures, options) 2 Logistics & delays Careful monitoring 3 Lower credit standards (developing countries) Risk Assessment 4 Potential profit Export sales profitable if managed

8. Monitoring Accounts Receivable

9. Account Receivable Days Average time to collect sales Compare with credit terms Rising trend may signal weak policy Affected by industry/economy Used by investors to assess credits Single number hide details (weakness)

10. Aging Schedule Days Outstanding Number of Accounts Percentage of Accounts (%) Amount Outstanding ($) Percentage Outstanding (%) 1 – 15 220 38.6 530,000 33.1 16 – 30 190 33.3 450,000 28.1 31 – 45 80 14.0 350,000 21.9 46 – 60 60 10.5 200,000 12.5 60+ 20 3.5 70,000 4.4 570 100.0 1,600,000 100.00 Sumber: Berk & DeMarzo (2024)

11. Thank You