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Receivables to Cash Options

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Please concisely explain the options a company has to convert its receivables to cash.

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Solution Summary

This 279 word solution gives 5 separate options for a company to consider when attempting to convert their receivables into cash.

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If the company makes credit sales to the customers with a promise from the customers to pay within a specified due date, then the amount of credit sales is called accounts receivable.
The amount of accounts receivable can be converted into cash by the following ways:

1. Cash discount: The Company can give cash discounts to the customers and induce them to pay the debt immediately. By doing this, the company can ...

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