The impact of account receivable management on financial performance
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This research lays out the findings of an investigation undertaken to determine the impact of account receivables management on financial performance at Senzpack (Private) Limited. Document study supported by interviews and observations were used as methods of data collection. Key informants and selected employees and suppliers were respondents for the self-administered interviews and questionnaires. Representatives from the finance department, sales and marketing department and customers were the key informants. Data collected was analyzed using tables, charts and graphs. The results of this study may be generalized to the account receivables of SMEs in the manufacturing sector. The results indicated that a company that significantly cuts off its trade receivables when it was in financial distress can experience an additional drop in sales and inventory returns. Furthermore business characteristics such as capital size are vital in determining the capabilities to withstand the consequences of receivables management. SPSS was used to identify the relationship between account receivables collection period and financial performance.The study revealed a strong positive relationship between ACP and current ratio, liquid ration and ROA.