ACCOUNT RECEIVABLE MANAGEMENT

Topics: Steel, Steelmaking, Pig iron Pages: 20 (3656 words) Published: November 15, 2014


REPORT
ON
ACCOUNT RECEIVABLE MANAGEMENT
TATA STEEL

Prepared by
www.AssignmentPoint.com

Date: 21-05-202

EXECUTIVE SUMMARY

The project deals in “account receivable management at Tata Steel”. Receivable management is one of the most important aspects of the organization, as it deals with the management of the outstanding. The profit of the company mainly depends on the accounts receivables. Therefore it needs a careful analysis and proper management.

Debtors occupy an important position in the structure of current assets of a firm. They are the outcome of rapid growth of trade credit granted by the firms to their customers. Trade credit is the most prominent force of modern business. It is considered as a marketing tool acting as a bridge for the movement of goods through production and distribution stages to customers.

Till few years back, Tata Steel had a very strict policy of selling against advance payments. That was an era of controlled economy. However, with an increasing domestic and international competition, Tata Steel could no longer afford this policy, in order to maintain its premium position. Further in order to capture a greater amount of market share, it was compelled to go by the industry norms and thus it ushered into the new era of credit sales. This resulted in credit sales going up significantly. A credit limit was sanctioned to every customer. The customers were required to pay the outstanding amount on the due date.

CONTENTS
PAGE NO.
COMPANY PROFILE

02
TREND OF SALES

03
TREND OF DEBTORS

04
DIVISION/PROFIT CENTRE WISE DEBTORS IN TATA STEEL FOR FY 07-08

05
TRENDS OF DEBTORS IN TATA STEEL

06
CREDIT POLICY OF TATA STEEL

07
CREDIT TERMS OF TATA STEEL

07-08
TATA STEEL’S CREDIT MONITORING AND CONTROL

08-10
OPERATIONAL WORKING AT TATA STEEL FOR MANAGING DEBTORS
11-12
UNDERSTANDING THE DEBTOR’S PROCESS SYSTEM

13
PROJECT ACTIVITY CHART
14
CREDIT ASSESSMENT POLICY

15-16

INTRODUCTION
Accounts receivable is an accounting transaction which deals with the billing of customer who owes money to a person, company or organization for goods and services that has been provided to the customers. In most business entities this is typically done by generating an invoice and mailing or electronically delivering it to the customer, who in turn must pay it within an established timeframe called credit or payment terms. The term receivable management is defined as “debt owed to the firm by customer arising from the sale of goods/ services in the ordinary course of business.” The receivable represents an important component of the current assets of the firm. Receivables may be known as accounts receivables, trade creditors or customer receivable. When a firm its products / services and does not receive cash for it immediately, the firm has said to be granted trade credit to the customers. Trade credit thus creates receivable / book debts, which the firm is expected to collect in near future. Accounts receivable are thus amounts due from customers, which bear no interest in essence, a company is providing no cost financing to the customer to encourage the purchase of the company’s product/services. Objective of receivable management “To promote sales and profit until that point is reached where the return on investment in further funding of receivable is less than the cost of funds raised to finance that additional credit(i.e. cost of capital)”

COMPANY PROFILE

Backed by 100 glorious years of experience in steel making, Tata Steel is the world’s 6th largest steel company with an existing annual crude steel production capacity of 30 Million Tons Per Annum (MTPA). Established in 1907, it is the first integrated steel plant in Asia and is now the world`s second most geographically diversified steel producer and a Fortune 500 Company Tata Steel has a balanced global...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on Accounts Receivables
  • Case Cash and Receivables Research Paper
  • Preventing Over Due Accounts Essay
  • Design a Proposal for Appropriate Controls to Cover Cash, Sales, Accounts Receivable, Inventory, and Production. Essay
  • The Big Three of Cash Management Essay
  • Accounts Receivable Management Essay
  • Essay about account
  • Account Receivable Essay

Become a StudyMode Member

Sign Up - It's Free