Question

Give some examples of what can happen if all the components of the revenue cycle do not function well.

​for any industry.

Answer 1

If all the component of revenue cycle do not function well than the company will face cash crunch. For example if the company is unable to realise the debtors then the working capital cycle of company may increase which will create problems for the company. i.e unable to pay to its creditors ,etc

Taking example of infrastructure company we can illustrate the need of cash. In this industry revenue from the projects are realised after completion of certain stages, now if revenue are notrealised in full then the company may not be able to complete the project