 Account receivables or credit accounts vary by types of customers and the related industry. If a firm decides to allow credit to its customers, it certainly puts itself into a trade off between enhancing its sales and the resulting un-collectibles. So we can say that an inefficient accounts receivable management practice may put the receivables into the fit of more bad debts, delaying collections and severe cash shortages. So what are the primary activities in accounts receivable management functions? It allows granting credit and processing transactions, means that it allows recording credit sales, posting payments against the outstanding balances in the account receivable accounts. The second function is the monitoring of the credit balances, which involves the regular reporting of outstanding balances and notifying the collection. Managers of the past due receivable amounts. The third activity in accounts receivable management practice is the measuring performance of the credit department, which involves the preparation and distribution of the key performance measurement reports, such as an account receivable edging schedule and the average collection period. If we see the goals of account receivable management system, the list is there, like efficient processing and maintaining the accurate up-to-date record as soon as possible after the collections are made by the treasury department. Controlling of the accounts receivable, assuming they are assuring their updated record, like they are in currency. No authorized entry into account receivable file, collection on accounts and coordination with the treasury department functions, coordination and notification with the credit management frequently, preparation of performance measurement reports on a regular basis, credit insurance arrangement, which refers to the practice that reduces the risk of barriers and shift some of the evaluation of credit worthiness to the insurer. What type of major types of credit accounts that can have in the market? The first is the open book, which is most common that can be seen between the firm. Documentary credit, it is without line of credit, most commonly seen between the cross-border or international transactions. Installment credit, like lease transactions, where we have regular and timely payments. Revolving credit, it is automatically renewed as the current data is paid off. And what are the forms of credit, terms of credit other than cash, like we have ordinary terms, which can be read like net T or net T2, for example, 210 or 1030, net 30, which means that if you pay within the first 10 days of the credit period, you are offered a 2% discount and if you forego the discount period, then you must pay the full amount at the 30th day. Then we have cash before delivery, which is payment in advance. Cash on delivery, this is payment to be made on delivery. Bill to bill, it refers to the payment of each prior bill before the new shipment is made. Monthly billing, this requires monthly billing that each month's bill must be paid before the start of the next month. How we can manage the customer's receipt? A firm's collection system is subject to number one, the type of its customers and the method of payment used by that particular customer. Now how a customer can transfer its funds to the company, there are certain modes like electronic fund transfer, automatic clearing house point of sales. Now, this the point of sales or POS captures the transaction data at the physical location at which the sale is made by the company or the seller debit card program. In this program, it is an arrangement whereby a customer authorizes a debit to his or an other authorized demand bank account. Log box arrangement, here the bank checks deposited today are available tomorrow to the collecting agency or the seller. Now, how we can evaluate account receivable management function for this we have an aging schedule. If we see on the left side of the screen at its first panel, we see that the account receivable are broken down into certain categories of days according to their outstanding pattern that we can see here. This schedule basically shows the total sales and receivables for each accounting period like here we have this period broken into a certain different months like January, February and so on. We can also convert this data into percentages in the sense that if we consider the month of January, we see the we have total account receivable as to $600 and the breakup of this starts from 330 into $30 where the accounts are over 90 days past due. If we develop a relation between the individual past due account with reference to the total of 600, we have this percentage ranging from 55% to 5%. So this means that 55% of 600 as accounts receivable are not due, just they are 1 to 30 days past old and over 90 days past due we have as little as 5% accounts receivable. These figure we can also use to develop weighted average collection period for a given period like if we see we have in the second or the lowest panel collection days for every class of past due accounts and if we multiply these collection days with the weights that we have calculated in upper table we can determine weighted average collection period for each class of our past due accounts and when we sum all these past due weighted days in a particular period we can determine the weighted average collection period for that particular period of time but there is a drawback of this account aging schedule because it requires more information than number of days of account receivable and this information may not readily be available especially for comparing the firms with each other.