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Grzegorz Michalski - One of the best experts on this subject based on the ideXlab platform.
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Accounts Receivable Management in Nonprofit Organizations
SSRN Electronic Journal, 2012Co-Authors: Grzegorz MichalskiAbstract:This paper contributes to the discussion about nonprofit organizations’ (NPO) model of financial management in the Accounts Receivable area. In fact, when it is judged from a technical point of view, the opinion that nonprofit financial management do not differ from a for-profit business could be justified, and is known in nonprofit financial management discussion (Jegers 2011; Hansmann, 1987). But that point of view is only partially right. Sloan et al. and Wedig et al. implemented with modifications a financial management portfolio theory to NPO financial management (Sloan et al., 1988; Wedig 1994, Wedig et al. 1996, Jegers, Verschueren, 2006). In the paper, the model of financial liquidity management in NPOs is presented from the perspective that claims the basic financial aim of an NPO is the most financially effective realization of the mission, resulting in the donors’ support for the organization (Leone, Van Horn, 2005; Eldenburg et al., 2011). It is close in many points to the maximization of for-profit firms’ values, but in fact it has many differences, and non-profit entrepreneurship could attract entrepreneurs more than for-profit organizations (Michalski, 2012; Chapelle, 2010). The net working capital requirements and the elements shaping it, such as the level of cash tied up in Accounts Receivable, inventories, the early settlement of Accounts payable, and operational cash balances, is one of the fields where a difference could be seen. Not many NPOs have to deal with all aspects of liquidity decisions or current assets management. Like for-profit organizations, some of them use only cash from current assets, redistributing it from donors to beneficiaries. Other NPOs collect free-of-charge goods for resale, using this income to realize their mission. Many NPOs are almost identical in operating processes with for-profit businesses, but are nonprofit because of their main mission.An NPO’s management team’s decision about the Accounts Receivables policy is a balance between gaining new customers by way of a more liberal organization’s trade credit policy and limiting the risk of allowing for delayed payment from unreliable purchasers. That kind of decision shapes the level and quality of Accounts Receivables (Michalski, 2012). Paraphrasing Keith Smith and James A. Gentry’s observations, it is possible to observe that Robichek et al. (Gentry, 1988; Robichek et al., 1965; Smith, 1973) talk about the risk involved to Accounts Receivable decisions which must be accepted by financial institutions’ pledging of Accounts Receivable of the firm. Keith Smith (Smith, 1973; Gentry, 1988) predicted and Michalski (Michalski, 2008) showed how a portfolio theory may be used to decrease the Accounts Receivable risk. Current assets, and among them Accounts Receivables, could be viewed in the portfolio context as presented by Friedland (1966; Gentry, 1988). Pringle and Cohn (1974; Gentry, 1988) tried to adapt the CAPM theory to working capital elements. Bierman and Hausman (1970; Gentry, 1988) discuss the granting policy of an organization and shows that trade credit policy requires balancing the future sales gains against possible losses. Lewellen, Johnson and Edmister (Lewellen, Johnson, 1972; Lewellen, Edmister, 1973) explain how and why traditional devices used for monitoring Accounts Receivable should be changed by new and better ones. Freitas (Freitas, 1973) shows the relationship between liquidity and risk during Accounts Receivable management. The question discussed in that paper concerns the making of decisions by NPOs in the Accounts Receivables area.
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Efficiency of Accounts Receivable Management in Polish Institutions
SSRN Electronic Journal, 2012Co-Authors: Grzegorz MichalskiAbstract:Accounts Receivable management should contribute to realization of basic financial purpose of an enterprise which is the realization of such strategy which is linked with its owner (or its stake holders) wealth maximization. The enterprise performance and value maximization strategy realization is more effective when it is realized in the most efficiency way. It is also executed with a focus on risk and uncertainty (Gentry 1988, Michalski 2012). This paper presents the consequences that can result from operating risk to determine the level of Accounts Receivable in the enterprise. The change in the level of Accounts Receivables in an enterprise increases net working capital level and influence costs of holding and managing Accounts Receivables. As illustration material is used data collected from 2009 and 2010 financial statements of over 3000 Polish enterprises.
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A Portfolio Management Approach in Accounts Receivable Management
South East European Journal of Economics and Business, 2008Co-Authors: Grzegorz MichalskiAbstract:The basic financial purpose of an enterprise is the maximization of its value. Trade credit management should also contribute to the realization of this fundamental aim. Many of the current asset management models that are found in financial management literature assume book profit maximization as the basic financial purpose. These book profit-based models could be lacking in what relates to another aim (i.e., maximization of enterprise value). The enterprise value maximization strategy is executed with a focus on risk and uncertainty. This article presents the consequences that can result from an operating risk that is related to purchasers using payment postponement for goods and/or services. The present article offers a method that uses portfolio management theory to determine the level of Accounts Receivable in a firm. An increase in the level of Accounts Receivables in a firm increases both net working capital and the costs of holding and managing Accounts Receivables. Both of these decrease the value of the firm, but a liberal policy in Accounts Receivable coupled with the portfolio management approach could increase the value. Efforts to assign ways to manage these risks were also undertaken; among them, special attention was paid to adapting assumptions from portfolio theory as well as gauging the potential effect on the firm value.
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Value Based Accounts Receivable Monitoring Techniques
2007Co-Authors: Grzegorz MichalskiAbstract:The maximization of wealth of its owners is the basic financial aim in the management of the enterprise. Accounts Receivable management contributes to the realization of this aim. The article presents the methods of monitoring Accounts Receivable accessible for enterprises.
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small and medium enterprises Accounts Receivable management with value of liquidity in view
2007Co-Authors: Grzegorz MichalskiAbstract:The basic financial purpose of an small and medium enterprise is maximization of its value. Accounts Receivable management should also contribute to realization of this fundamental aim. The key theme of this paper is Accounts Receivable management with value of liquidity in view. Many of the current asset management models that are found in financial management literature assume book profit maximization as the basic financial purpose. These book profit-based models could be lacking in what relates to another aim (i.e., maximization of enterprise value). The small and medium enterprise value maximization strategy is executed with a focus on risk and uncertainty. An increase in the level of Accounts Receivables in a firm increases both net working capital and the costs of holding and managing Accounts Receivables. Both of these decrease the value of the firm, but a liberal policy in Accounts Receivable coupled with the portfolio management approach could increase the value. Efforts to assign ways to manage these risks were also undertaken; among them, special attention was paid to adapting assumptions from value of liquidity theory as well as gauging the potential effect on the firm value.
Cuicui Luo - One of the best experts on this subject based on the ideXlab platform.
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a decision support approach for Accounts Receivable risk management
Systems Man and Cybernetics, 2014Co-Authors: David L Olson, Cuicui LuoAbstract:Financial disasters in private firms led to increased emphasis on various forms of risk management, to include market risk management, operational risk management, and credit risk management. Financial institutions are motivated by the need to meet increased regulatory requirements for risk measurement and capital reserves. This paper describes and demonstrates a model to support risk management of Accounts Receivable. We present a decision support model for a large bank enabling assessment of risk of default on the part of loan recipients. A credit scoring model is presented to assess account creditworthiness. Alternative methods of risk measurement for fault detection are compared, and a logistic regression model selected to analyze Accounts Receivable risk. Accuracy results of this model are presented, enabling Accounts Receivable managers to confidently apply statistical analysis through data mining to manage their risk.
Luann J. Lynch - One of the best experts on this subject based on the ideXlab platform.
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MGM Mirage—Accounts Receivable
Darden Business Publishing Cases, 2017Co-Authors: Luann J. LynchAbstract:Students are presented with the balance sheet, income statement, Accounts-Receivable footnote, excerpts from the footnote on significant accounting policies, and excerpts from Management's Discussion and Analysis from MGM Mirage's 2004 Annual Report, and are asked to respond to several questions regarding information in the materials. Questions center around what can be inferred about the impact of Accounts Receivable, allowance for doubtful Accounts, write-offs, and other data on the balance sheet and income statement.
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MGM Mirage - Accounts Receivable
2008Co-Authors: Luann J. LynchAbstract:Students are presented with the balance sheet, income statement, Accounts-Receivable footnote, excerpts from the footnote on significant accounting policies, and excerpts from Management's Discussion and Analysis from MGM Mirage's 2004 Annual Report, and are asked to respond to several questions regarding information in the materials. Questions center around what can be inferred about the impact of Accounts Receivable, allowance for doubtful Accounts, write-offs, and other data on the balance sheet and income statement.
Greet Asselbergh - One of the best experts on this subject based on the ideXlab platform.
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A Strategic Approach on Organizing Accounts Receivable Management: Some Empirical Evidence
Journal of Management and Governance, 1999Co-Authors: Greet AsselberghAbstract:In this paper, the organizational behavior in managing Accounts Receivable is studied. It is based on the recent surge of interest in trade credit management from both academics and practitioners emphasizing 1) the rather permanent character of these short-term but continuously renewed investments and 2) their strategic potential due to the existence of financial, tax-based, operating, transaction and pricing motives. The paper focuses on a search for sources of such a strategic value and for the determinants of its risk. More specifically this potential strategic value is said to create a need for flexibility and control in managing Accounts Receivable. It will therefore induce a need for internalization of its management. The resulting risks, however, favor its externalization. This results in a revision of the existing decision-making processes since, the extension of trade credit becoming a strategic asset, investments in Accounts Receivable cannot be judged by the financial needs incurred as measured by the traditional DSO-rate anymore. More specifically, a transaction cost theoretic approach is used to explain the decision whether or not to internalize the firm's Accounts Receivable management and its risk, resulting in a set of hypotheses to be tested on a sample of both large and medium-sized Belgian companies.
Qu Rui-b - One of the best experts on this subject based on the ideXlab platform.
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The Accounts Receivable management of the small and medium sized enterprise
Economic Research Guide, 2015Co-Authors: Qu Rui-bAbstract:First of all,by Accounts Receivable definition and the background of the Accounts Receivable were briefly;then on the basis on the research of small and medium-sized enterprises,small and medium enterprises should Accounts Receivable present situation and the specific causes are analyzed,and points out that does not correctly deal with Accounts Receivable management to the enterprise to bring the influence and harm. Finally,in view of the problems existing in the management of small and medium-sized enterprises proposed some countermeasures,to improve the enterprise Accounts Receivable management system,establish the scientific management system,to realize the optimization of enterprise cash flow and reduce Accounts Receivable management cost should aim.
