Analysis of accounts receivable and accounts payable of a commercial organization

The result of commercial activity of any organization is determined not only by its efficiency, but also by the financial and economic activity of its partners. As a result of non-compliance with the terms of contracts between economic entities, various situations arise related to the untimely receipt of funds, failure to fulfill obligations, which subsequently complicates the processes of purchasing material assets necessary for the implementation of production activities. Failure to fulfill obligations by both debtors and creditors leads to the emergence of financial debt, a decrease in payment capabilities and the level of profitability. The presence of accounts receivable leads to insufficient working capital, which negatively affects all processes occurring in the organization, up to the delay in cash payments due to employees of the organization. However, this is a normal process arising as a result of settlement transactions with counterparties. Accounts payable arise due to untimely fulfillment of obligations to suppliers or contractors, and have a significant impact on the business reputation of an economic entity. Untimely repayment of accounts receivable leads to the risk of overdue debt and non-receipt of funds for shipped material assets, as well as services rendered or work performed. The presence of overdue accounts payable leads to deterioration of business reputation and possible legal problems. A well-organized system of accounting and analysis in an organization allows finding the optimal ratio between accounts payable and receivable, ensuring more efficient operation of the entire economic entity in order to prevent a decrease in financial stability. A special role is given to internal control, which is designed to ensure compliance with the law in settlements with business partners.