account receivables analysis

Company Background :

Company XYZ which provides marine services and ship services. It provides an entire range of ship services to their clients include port agency, cargo handling, inland haulage and warehousing, catering, maintenance, customs clearance, as well as export and import documentation.

Services provided to all ships and other nautical vessels that come from the entire world and enter the Red Sea ports in 5 branches along the coast.

the company has important clients with credit account who pay each 30 or 60 days and sometimes the company provides the services for new customers with also credit account who just passed by for ship catering or other urgent issues and then the company lose contact with them .

the problem is : the company experience a sharp increase in Account Receivable over years ( from 2015 to 2016 ). and no clear procedure for collecting the account receivables that results in an increase in bad debt and around 1 million reported as bad debts .

here is the a table that shows some information :

Account	2015	2016
Receivables	9,324,664.01	15,139,898.12
Net credit sales	74,194,787.22	81,716,361.76

Obstacles:

1- The delay of sending the invoices for the clients

2- Wrong data

3- Entering invoice in another client account

4- unconditional credit sales and no credit policy

The requirement :

Analysis of the problem :

1- Brief introduction of the problems and the reasons (over view that comprise of a brief on the purpose of the study + identify reasons and the impact of this problem in the company + the risk of bad debt )

2- Accounts receivable turnover

· Introduction ( 3 lines )

· Calculate Accounts receivable turnover for 2016 ( show the formula used )

· Analysis of the result ( diagram show the result + explain )

3- Suggest any other analysis method can be used to the same problem ( explain )

Proposed Solution

     State your solution clearly and specifically. Describe exactly what should be done and how it should be done, including by whom, with whom, and in what sequence.

1- Account receivable aging report

· Introduction (what is it ? purpose ? how can it helps in controlling ? )

· Create aging report and explain it in details (how we used it ? how will help to determine bad debts ? )

2- Credit policy and terms

· Introduction (what is it ? purpose ? how can it helps in controlling ? )

· Suggest Credit policy can the company use to avoid the risk of bad debts and increase controlling in collecting A/R

3- Suggest any other solution can increase the efficiency of collecting receivables .

Summery :

summary that will offer a brief review of the analysis