RECEIVABLES MANAGEMENT IN COMPANY XY AND THE IMPACT OF PAYMENT INDISCIPLINE ON COMPANY OPERATIONS

In today's world, companies that wish to be competitive and commercially successful must make their decisions based on market conditions, which are changing very rapidly in the present day. The ability to adapt quickly enables them to respond in a timely manner to changes in the environment in which they operate. I hope that the effectiveness and timeliness of debt collection will change significantly given that the enforcement order will now be executable within two days. Given that there are now 45 people employed in the department, of which four judges will deal exclusively with enforcement proceedings, the hope for creditors is somewhat greater and the conviction of some who refuse to settle their obligations that this pays off will no longer be so widespread.

Problem

In today's world, companies that wish to be competitive and commercially successful must make their decisions based on market conditions, which are changing very rapidly in the present day. The ability to adapt quickly enables them to respond in a timely manner to changes in the environment in which they operate. For successful operations and monitoring thereof, companies must have clearly and realistically set goals, vision and business policy for the current period and for the long term.

Company management has at its disposal various information and data when making decisions and managing the company. Quality and up-to-date information is the first step towards successful company management. Incorrect decisions can be fatal for the development and survival of the company.

It is very important how a company manages receivables, monitors receivables, in short, how it manages receivables and receivables analysis. Unfortunately, receivables arising in companies are, in today's economic conditions, the reason for liquidity difficulties in companies, as they face considerable financial indiscipline. We deal with it every day, whereby we find that we observe its negative escalation on the one hand and the ineffectiveness of sanctions on the other hand.

It is very worrying that we are all going round in a vicious circle from which we cannot find the right solutions to improve the situation. All this has an impact on the liquidity of companies, on development, on the ability to finance and consequently also on the development of the economy. Through the topic addressed in this diploma thesis, she came to understand that continuous monitoring of operations and analysing various data and accounting information is essential for successful company operations, so that we can realise our vision and the goals we have set, and that they enable us to review whether we have achieved the set goals or not and whether we are approaching the company's vision.

Financial indiscipline is a major problem for all business entities in the economy, unfortunately also in their company. It is worrying because all countries in the world are struggling with it and it is consequently the cause of the collapse of many companies. According to data from the Chamber of Craft and Small Business, payment indiscipline is growing and becoming an ever greater burden on Slovenian craft and entrepreneurship, yet there is still no proper supervision of the payment system.

In their company too, we deal with sales, which give rise to receivables, and consequently we also face payment indiscipline. We invest a great deal of effort and time in debt collection. For a certain proportion of debtors, it is sufficient if we call them by telephone and remind them of the overdue receivable.

Unfortunately, however, a very large proportion of debtors are those who do not respond to calls or reminders, and among them are also those who do not even accept the reminder. The biggest problem, however, is the excessively long deadlines for collection through the courts, as good liquidity is very important for a small company, but if it has many customers whom it is pursuing through the court, it cannot count on these funds for a long time. To make the situation even worse, entrepreneurs themselves ensure this by closing down companies – especially small companies, virtually overnight, without prior notice, closing accounts and thus causing the company that has filed for enforcement only additional collection costs.

Payment insurance represents too high a cost for small companies, except in exceptional cases when they really cannot find another solution and if the deals they are negotiating are large enough.

Results

I hope that the effectiveness and timeliness of debt collection will change significantly given that the enforcement order will now be executable within two days. Given that there are now 45 people employed in the department, of which four judges will deal exclusively with enforcement proceedings, the hope for creditors is somewhat greater and the conviction of some who refuse to settle their obligations that this pays off will no longer be so widespread. Proposals:

• Continuous verification of the payment capacity and creditworthiness of customers, as this would avoid many a problem and subsequent collection costs,
• Shorten payment deadlines or try to negotiate a longer payment deadline with our suppliers,
• More frequently require payment by proforma invoice, especially from new customers and customers from distant locations,
• Determine special discounts for regular customers and good payers,
• Conclude contracts with all customers in which sanctions would be precisely determined in the event of non-payment of due obligations,
• In the case of disputed receivables, it would be good for the company to use the option of selling receivables.