Managing receivables

In this lesson

1. 0:00 Managing receivables overview
2. 0:38 Credit analysis and customer assessment
3. 1:13 Setting credit limits and control
4. 1:58 Debt collection and payment follow-up
5. 2:38 Factoring receivables explained
6. 4:10 With recourse vs without recourse
7. 6:27 Worked example: Jerker factoring arrangement
8. 7:30 Prompt payment discounts strategy
9. 8:56 Calculating discount cost-benefit analysis
10. 11:47 Foreign accounts receivables risks
11. 13:41 Managing international receivables

About this lesson

You'll explore credit analysis and assessment, understand how to set and maintain appropriate credit limits, and discover practical tools like factoring and prompt payment discounts to optimise cash flow while minimising bad debt risk. The video walks you through real worked examples, including when factoring with or without recourse makes financial sense, and how to evaluate whether early settlement incentives are genuinely cost-effective for your business. Managing receivables well protects your organisation's cash position and reduces irrecoverable debt. The lesson covers the complete receivables cycle: assessing customer creditworthiness upfront, controlling credit exposure through clear limits tailored to risk, and pursuing timely collection through reminders and follow-up. You'll understand the mechanics of factoring—how selling receivables to a third party can inject cash quickly—and learn the critical difference between recourse (you retain the risk) and non-recourse (the factor bears it) arrangements, plus why non-recourse costs more. The video also addresses practical complications like foreign receivables, where extended lead times, currency risk, and geographical distance make collection harder and require additional safeguards such as letters of credit or export factoring. Throughout, you'll see how to weigh costs against benefits—for instance, whether offering a 1.5% prompt payment discount actually saves money when you factor in interest savings versus lost revenue. These are the real trade-offs you'll face in practice, and mastering this analysis will sharpen your decision-making on the job.

Duration: 15m