Impact of the Economic Situation on Accounts Receivable Management

Therefore, it directly affects the economic situation, thus intervening in the supply and demand in the investment processes, as well as in the commercial sectors in small industries or businesses and large companies.

That is why the direct effects of inflation translate into exponentially higher increases in operating costs and bring lower working capital, as well as a rise in consumer prices and even the possible need for indebtedness with banks.

Likewise, this problem causes companies to pay debts in a delayed manner and the impossibility of fulfilling commitments acquired with suppliers, which in turn causes the company's cash flow to contract.

On the other hand, accounts receivable management is known as the accounting procedure where we can record all the increases as well as the decreases resulting from credit sales.

It should be noted that accounts receivable represent for any organization one of the sources of income, which generates financial resources for the fulfillment of its commitments with third parties.

It also allows them to make investments according to the company's operating plan and its vision of the market. Likewise, the management of accounts receivable represents the means that allows companies to sell their products and overcome the competition, offering payment facilities through credit, which serves as part of the company's services.

However, to prevent inconveniences, this management must establish rules, policies, and efficient procedures for the granting of credit, according to the purchasing power of customers so that it is not subject to parodies product of inflation, so that they can recover the short term investment and give an effective rotation to its inventory.