Credit policy for a company
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During the meeting, my boss points out that the current level of bad debt and investment in accounts receivable are a little bit large. Apart from tightening the current credit policy, could you please suggest one way to reduce each of them if our company wants to maintain the credit policy.
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The solution discusses credit policy.
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Reduce the investments in accounts receivables by:
Pledging Accounts Receivables
Accounts receivables represent the money owed to a business from credit sales to customers. Accounts receivable can also be used as a way of short term financing if it is used as collateral for a loan. This is known as the pledging of the accounts receivable. The value of receivable depends on the credit ...
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