Managing receivables
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Managing Receivables. Credit policy toward customers. When selling on credit, businesses need clear policies about…. Which customers? Use the 5 C’s…. Length of credit period determined by…. Note contribution = price – variable cost = 40 – 20 = 20 (or 50% of selling price).

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Managing Receivables

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Managing receivables

Managing Receivables

Credit policy toward customers


When selling on credit businesses need clear policies about

When selling on credit, businesses need clear policies about…..


Which customers use the 5 c s

Which customers? Use the 5 C’s…


Length of credit period determined by

Length of credit period determined by…


Managing receivables

  • Note contribution = price – variable cost = 40 – 20 = 20

  • (or 50% of selling price)

* More credit implies more customers.


Managing receivables

* The increase in finance costs assumes a 10% interest rate. There is no increase in non-payment added in this example.


Cash discounts

Cash discounts


Collection policies steps can be taken to reduce the risk of non payment

Collection policies: Steps can be taken to reduce the risk of non-payment


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