Maintainence of Liquidity in Business

One of the principal aims of a Manager is the maintenance of liquified assets. Maintenance of watery assets connotes that the firm always has enough exchange in choke to pay for - 1. Recurring Expenses 2. To make unpredicted large purchases 3. To meet emergencies at all times The outdo way to maintain a cash flow is to encumber overdue accounts and avert a blockage in the influx of income. The ideal way to do this would be avoiding doing seam with nodes who prepare proven bad credit histories however, on the other hand rigid customer policies limiting the firms telephone circuit with companies having only innocent credit records would deplete the firms pool of potential customers. With the focussing looking at expanding the argument it becomes necessary to do business with most people who deficiency to do business with you. The populace of a growing business is that the biggest and best clients similarly want sufficient billing period and then ask for 2 months time for making payments. Here is where the Manager is caught between two horns.

While the firm does not want to lose clients or destroy both potential or established business relationships by laying down harsh payment terms, it is also necessary for the Manager to take some control of accounts receivable to avoid causing chaos with the cash flow. Expansion of business requires extension of credit and when a firm extends credit, it is in personnel loaning customers money, which in turn affects liquidity as any party wants to be reasonably sure that the money result be paid back. The primary step towards maintenance of liquid assets therefore commences with verification of customer credit worthiness. sure steps can be taken to check whether the customer is good enough on his payments- 1.Check each companys credit history before extending credit. 2.Check how desire the company has been in business. 3.Obtain Credit Reports as they commemorate historical payment data; bankruptcy records; any... If you want to earn a full essay, order it on our website: Ordercustompaper.com

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