The management and control of receivable and the profitability of financial enterprises a casestudy of qaran express branch, kamp ala, uganda.

Abstract

This chapter contains background, research problem, research questions, research purpose, research objectives, scope and significance 1.lBACKGROUND Business organizations are organized as profit oriented. They are established to achieve well organized and set goals and these goals guide it to accomplish certain results. To achieve such goals, organizations perfo1m some functions which may lead them asce1iain these goals. In business organization, earning a satisfactory profit usually is an important goal. The leaders of the organization are required to direct their actions towards the attainment of these goals. And for me the ways in achieving management of receivables first is the formulation of credit policy there are guidelines that are followed in managing credit standards, credit terms and collection eff01i. The objective of this policy is to have optimal investment in debtors. Second is the credit rating which various characteristics of the applicant are quantitatively rated and credit decision made on the basis of total score. Characteristics like marital status, level of education, occupational stability and historical background. Thirdly, evaluating liquidity of receivable Investors and managers keep a watchful eye on the relationship among sales, accounts receivable, and cash collections. If the sales increase, then accounts receivable are also expected to increase. But a disproportionate increase in accounts receivable might signal trouble fomihly, building a 1 comprehensive internal control over receivables this facilitates to handle all employees in separation of duties which finally protect them to make collusion and theft. Fifthly, monitoring collection, it aids estimation of the timing of future cash inflows, which is very important to the treasurer's effort to prepare cash budget. It provides information about the overall collection experience of the company and identifies problem accounts.