The schedule of budgeted receipts from debtors
ID:CVSBRD
Video Overview
The proper cash management in a business is essential as it will ensure that there is sufficient cash to meet the future cash requirements of the business. The tool that management accountants use to forecast the business’s cash position is the cash budget. One of the most important amounts on the cash budget is the receipts from debtors. Remember debtors arise due to credit sales, therefore if the business is showing a substantial net profit, it does not mean its cash position is good as well. Only when the debtors pay their debt is the money collected by the business. It is therefore very important for a business to have a strict collection policy for debtors so that the credit sales convert to cash within a reasonable time period. An important figure in the cash budget is the schedule of budgeted receipts from debtors. In this tutorial you will learn how to draw up the schedule of budgeted receipts from debtors.
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