ACCOUNT RECEIVABLE MANAGEMENT
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.
TREND OF SALES
TREND OF DEBTORS
DIVISION/PROFIT CENTRE WISE DEBTORS IN TATA STEEL FOR FY 07-08
TRENDS OF DEBTORS IN TATA STEEL
CREDIT POLICY OF TATA STEEL
CREDIT TERMS OF TATA STEEL
TATA STEEL’S CREDIT MONITORING AND CONTROL
OPERATIONAL WORKING AT TATA STEEL FOR MANAGING DEBTORS
UNDERSTANDING THE DEBTOR’S PROCESS SYSTEM
PROJECT ACTIVITY CHART
CREDIT ASSESSMENT POLICY
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)”
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...
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