Receivables Management

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INTRODUCTION:

UNIFLEX CABLES LIMITED appointed interns to study the receivables position of their company. I was asked to analyze the data of the past six months starting from October’08 to March’09. I had to analyze the debtors’ payment pattern for that period and find out the reasons why there was a delay in receiving payments from the debtors’.

OBJECTIVE OF THE STUDY:

• Compare Actual Date of Receipt from customers with the Payment Due Date. • Find out the number of days delay in receiving the payment. • Compute the interest cost @12% for the number of days delayed. • Find out the reason for delay in case of each invoice. • Analyze the reasons.

• Find out the impact of each reason.
• Provide Recommendations and Suggestions.

NEED OF THE PROJECT:

In the current market situation handling the receivables is very important. The need for this research was to understand how much interest cost was lost due to delay in payment by the customers. This analysis helped the company understand its receivables collection rate. It also helped them in setting a proper procedure for future keeping this analysis as base.

SCOPE OF THE PROJECT:

UNIFLEX CABLES LIMITED intends to improve the receivables management situation of its company. The scope of the project is to find the loop holes in the collection procedure. They also intend to improve their credit control activities

RESEARCH METHODOLOGY:

We were asked to make an in depth analysis of each and every process starting from the initial stages of enquiry done by the customers to the final receipt of payment from the customers. The data was bifurcated month wise. For the convenience of analysis the data was further bifurcated on the basis of groups of managers. A detail study was done for all customers invoice wise.

The following points related to each customer were looked upon: • The payments terms with each customer.
• The delivery schedule accepted for each order.
• The invoice date of each customer
• The lorry receipt of each delivery
• When was the receipted challan received from the transporter? • An exact due date for each invoice with respect to the payment terms was found out. • The date on which the actual payment was received.

• Was it according to the decided terms?
• If there was a delay then for how many days?
• The reason for such delay was found out.
• An interest of 12% was charged for the period of delay.

LIMITATIONS OF THE PROJECT:

• The study is conducted purely on the data made available as per the financial statements of the company and interferences were drawn on theoretical conventions. • The period of study was short.

COMPANY PROFILE:
UNIFLEX CABLES LIMITED is a leading company in India manufacturing and supplying wide range of cables by brand name of UNICAB. The manufacturing plants are located at Umbergaon, Gujarat and Silvassa. UNIFLEX CABLES LIMITED manufactures cables as per various National, International and Customers Standards and specializes in producing cables for critical applications. These cables are designed after detailed engineering to meet the specific requirement and high service performance. All the divisions have their independent testing equipments. The quality assurance system at each division ensures the quality of product at every stage right from raw material up to finished product. The company has been accredited since 1996 with ISO: 9001-2000 certification from NVT-KEMA. COMPANY HISTORY:

UNIFLEX CABLES LIMITED has been improving itself at each stage of its existence. The following points show its development over the years 1981: ESTABLISHED WITH ELASTOMERIC DIVISION
1990: INCORPORATED AS UNIFLEX CABLES LTD
1993: POWER CABLE DIVISION
1995: OPTICAL FIBER CABLE DIVISION
1996: JELLY FILLED (PIJF) CABLE DIVISION
1996: ISO 9002 CERTIFIED
1999: ISO 9001 CERTIFIED...
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