How To Analyze Accounts Receivable

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How To Analyze Accounts Receivable
How To Analyze Accounts Receivable

Video: How To Analyze Accounts Receivable

Video: How To Analyze Accounts Receivable
Video: Accounts Receivable Analysis 2024, November
Anonim

To effectively manage the company's cash flows, it is necessary to assess the current state of funds in the current accounts, as well as to analyze the debts owed by debtors. To analyze accounts receivable, you need to calculate the following financial indicators.

How to analyze accounts receivable
How to analyze accounts receivable

Instructions

Step 1

Calculate the turnover of accounts receivable using the formula: Turnover DZ = (sales revenue / average accounts receivable) * number of days of the reporting period. the beginning and end of the reporting period and dividing the resulting number by 2. Multiply the resulting coefficient by the number of days of the reporting period. Calculate the turnover of accounts receivable for the previous reporting periods, for individual, largest debtors.

Step 2

Analyze how the "accounts receivable" turnover has changed. The lower this figure, the better. If the number of days of accounts receivable turnover has decreased, this means that buyers are more actively paying the bills, and the company's solvency increases.

Step 3

Calculate the ratio of overdue receivables using the following formula: KPI = amount of overdue receivables / total amount of receivables. Take the amount of overdue receivables from the accounts receivable report, the total amount of receivables from the balance sheet.

Step 4

Calculate the ratios of overdue receivables for previous reporting periods. Track the dynamics of changes in the coefficient, draw conclusions. If this ratio tends to increase, it means that the share of overdue "receivables" is increasing. The increase in overdue accounts receivable worsens the turnover of funds and reduces the solvency of the company.

Step 5

Draw up a statement of outstanding receivables at the end of the reporting period. From the total amount of receivables, select the debt related to the sale of the reporting month. Next, calculate the share of outstanding receivables in the volume of sales for this month. Track the dynamics of changes in the repayment of accounts receivable, draw a conclusion about a slowdown or acceleration in the receipt of proceeds from the sale of products.

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