Factors Affecting The Amount Of Accounts Receivables

Some of factors include the following:

Type/Nature of Business: Food business on cash basis whilst manufacturing business has more accounts receivable  Level Of Sales: Aggressive top management will resort to relaxation or extension of credit terms to the customers to boost up the firms’ sales volume  Credit And Collection Policy: Companies which has strict credit and collection policy will have lower accounts receivables than those which blatantly ignore good credit policy & procedure.