If the number of days for the company to actually recover the accounts exceeds the number of days for the accounts receivable stipulated by the company, it means that the debtor is in arrears for a long time, and the credit reliability is low, which increases the risk of bad debt losses; At the same time, it also shows that the company's poor collection of accounts has caused bad debts or even bad debts, which has caused the current assets to not flow, which is very unfavorable to the normal production and operation of the company.
Matters needing attention
The turnover rate of accounts receivable should be considered in combination with the operation mode of enterprises. In the following cases, the use of this indicator cannot reflect the actual situation:
First, enterprises that operate seasonally.
Second, installment payment is widely used.
Third, a large number of cash-settled sales are used.
Fourth, a large number of sales at the end of the year or a sharp decline in sales at the end of the year.