There is a direct relationship between your firm’s growth and its working capital requirement. As your sales grow, your level and composition of working capital, namely, Inventory, Receivables, Cash, Payables, Short Term Loans etc. will also change. Accounts Receivables (AR) is one of the major components impacting the requirement of working capital.

Small businesses are privately owned corporations, partnership or sole proprietor that has fewer employees and/or less annual revenue than a regular-sized business or corporation. Businesses are defined as “small” in terms of being able to apply for government support and qualify for preferential tax policy varies depending on the country and industry.

Efficient Accounts Receivable (AR) controls are an integral part of cash flow management that have serious repercussions on the company’s sales and profits. Accounts Receivable controls must be an integral part of any company’s financial management system. When cash flow problems surface on a regular basis, it is inevitably a sign that Accounts Receivables are poorly managed.