Disscussion Question

Part 1: Minimum of 250 words Examine the five (5) steps to managing accounts receivable. Speculate on the step that is most vulnerable to fraud. Suggest at least two (2) actions that a company can take in order to protect this step from fraud. Imagine that your company has tasked you with developing a plan for factoring accounts receivables. Create one (1) scenario that demonstrates the key benefits and / or detriments to your company from factoring accounts receivable. Part 2: Please respond to the below and give your opinion on the response. Minimum 200 words. The (5) steps to managing accounts receivable are (1) Determining who to extend credit to (2) Establishment of payment period (3) Monitor collections (4) Evaluate liquidity of receivable (5) Accelerate cash receipts from receivable when necessary. The most vulnerable step of the 5 steps to managing accounts receivable against fraud is the ‘extending of credit.’ If this step is compromised, the other steps usually don’t have a chance. If the extension of credit has been extended to an unreliable customer due to ‘false representation’, setting up a payment plan would be policy and procedure but it will be in vain also because it won’t be paid. But, two actions a company could take to protect against this is to (1) run credit checks to determine if a receipent is reliable in paying his/her bills on time and (2) request bank references on behalf of the new customer. This protects cashflow. In doing these two things, you are ensuring that (a)the customer pays his/her bills on time and (b) if the customer happens to default on a payment(s), which is highly unlikely, the responsibility to pay the balance is shifted to the third party (the bank). The key benefit is usually the recovering of 80 to 85% of your accounts receivable by factoring invoices to a third party. The detriment of this is that the company still loses on a smaller scale because account receivables are not paid in full to the original creditor. In my opinion, it’s a double-edge sword and there is almost always a waiting period to collect, even it the waiting period is short. “The balance, less the factoring charges is paid one the FACTORING COMPANY RECEIVES payments from your customers (Cole-Ingait, 2018). The scenario I would use to display the example is that of an insurance company and the insuance agent. For instance, the insurance agent is fronted $4,000 by the insurance company to jumpstart his/her business as an insurance agent. Written in the contract is the agreement that disbursed funds will be repaid by the receiver on a month-to-month basis until payment is cleared. The agent decides the commissioned based career is not for him and resigns. After noticing the loans hasn’t been repaid, a third party is assigned to collect the funds from the former agent. Once collected, 80 to 85% of the receivable will go to the insurance company, the rest goes to the third party collection agency.

Don't use plagiarized sources. Get Your Custom Essay on
Disscussion Question
Just from $13/Page
Order Essay
Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency

Order your essay today and save 15% with the discount code ESSAYHELP