1, opportunity cost:
Refers to other income abandoned due to investment in accounts receivable. There are three factors that determine the opportunity cost: the amount of accounts receivable, the rate of return on other investments of enterprises and the settlement time. Of these three factors, the first two are objective factors, while the settlement time is subjective, so the holding cost mainly depends on the settlement time.
For example:
In life, some opportunity costs can be measured by money. For example, if farmers get more land, they can't choose to raise chickens if they choose to raise pigs. The opportunity cost of raising pigs is the benefit of giving up raising chickens. However, some opportunity costs can't be measured by money, for example, choosing between reading and studying in the library or enjoying the happiness brought by TV series.
Opportunity cost generally refers to one of the biggest losses after making a choice. Opportunity cost will change with the change of payment price. For example, when the preference or value of the abandoned option changes, the value gained will not change the opportunity cost.
2. Management costs:
Refers to the expenses incurred by enterprises to manage accounts receivable. It mainly includes expenses such as investigating customers' credit status, collecting all kinds of information and overdue collection of accounts.
For example:
Management expenses refer to the expenses incurred for organizing and managing the production and operation of an enterprise, including the company funds incurred by the board of directors and the administrative department of the enterprise in the operation and management of the enterprise, or which should be borne by the enterprise in a unified way (including wages and welfare expenses, repair expenses, material consumption, amortization of low-value consumables, office expenses, travel expenses, etc.). ).
Trade union funds, unemployment insurance premiums, labor insurance premiums, directors' fees, agency fees, consulting fees, attorney fees, business entertainment fees, property taxes, vehicle and vessel use taxes, land use taxes, stamp duty, technology transfer fees, mineral resources compensation fees, amortization of intangible assets deferred assets, employee education funds, research and development fees, sewage charges, etc.
3. Bad debt cost:
Refers to the loss of accounts receivable caused by irrecoverable. The reasons for bad debts are mainly due to the bankruptcy, dissolution, financial deterioration or long-term overdue of customers.
For example:
In reality, the cost of bad debt loss has become the biggest cost of holding accounts receivable, so enterprises must do their best to prevent bad debt loss.
From the nature of bad debt loss, it belongs to the category of variable cost, that is, the cost of bad debt loss is directly proportional to the amount of accounts receivable. The greater the amount of accounts receivable, the greater the possibility of bad debt losses, and vice versa.