Collection policy
Collection policy is the procedure for collecting accounts receivable. A change in collection policy will affect sales, days sales outstanding, bad debt losses, and the percentage of customers taking discounts.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Collection policy. The procedure for collecting accounts receivable. A change in collection policy will affect sales, days sales outstanding, bad debt losses, and the percentage of customers taking discounts.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
