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Controlling Current Assets (Inventories (Hoarding stock increases chances…
Controlling Current Assets
Receivables
Procedures and policies to ensure they get paid
Following up on unpaid accounts
Checking credit ratings before
Setting due dates (30 days)
Inventories
Only keep the amount of stock expected to sell
Don't overstock
Don't understock
Must ensure stock will create a turnover to cover its debts
Hoarding stock increases chances for:
Damage
Out of date
Theft
Cash
Management should have procedures to prevent:
Theft of cash
Loss of cash
The business should plan what to do with cash before they have it
Ensures there is no surplus of cash doing nothing
Cash sitting around does nothing for the business