EVALUATING DEBTORS’ MANAGEMENT PRACTICES: TECHNIQUES FOR OPTIMIZING ACCOUNTS RECEIVABLE AND MINIMIZING BAD DEBTS - ULTRATECH CEMENT

Abstract

Debtors’ management is a crucial aspect of working capital management that directly influences an organization's liquidity, profitability, and financial stability. Effective management of accounts receivable ensures timely collection of outstanding dues, improves cash flow, and reduces the risk of bad debts. In today's competitive business environment, organizations extend credit facilities to customers to enhance sales and maintain customer relationships; however, inefficient credit management may lead to delayed payments, increased collection costs, and financial losses. This study evaluates various debtors management practices and techniques used by organizations to optimize accounts receivable and minimize bad debts. It examines credit policies, customer creditworthiness assessment, receivables monitoring systems, collection procedures, aging analysis, and debt recovery mechanisms. The research also highlights the role of technology and automated receivables management systems in improving collection efficiency and reducing credit risk. The study aims to analyze the effectiveness of existing debtors management strategies and identify best practices that contribute to efficient receivables control. It further explores the relationship between debtor turnover, collection period, and organizational profitability. The findings indicate that firms with strong credit evaluation procedures, regular monitoring of receivables, and proactive collection efforts experience better cash flow management and lower levels of bad debt. The study concludes that effective debtors management is essential for maintaining financial health and achieving sustainable business growth. Organizations should adopt systematic credit control measures, leverage digital tools, and establish robust collection policies to optimize accounts receivable performance while minimizing the incidence of bad debts. These practices contribute significantly to enhanced operational efficiency, improved liquidity, and long-term organizational success