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What is the impact of Credit Collection Management to the credit collection process?

What is the impact of Credit Collection Management to the credit collection process?

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Answer #1

Credit Collection Management is also known as receivables management. It is a part of Working Capital Management. Management of credit collection has greater impact on credit collection process.

  • It helps to collect the receivables faster
  • It will make the credit collection process effective
  • Helps to improve the cash forecasting
  • Helps to reduce the financing costs by employing the methods like factoring
  • Enables the company to select suitable credit policy
  • Better credit management of the company helps to reduce the amount of bad debts

Thus Credit Collection Management helps to ensure easy flow of cash into the company.

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