CHAPTER 1

INTRODUCTION OF THE STUDY

1.1 Introduction:
The term receivable is defined as “debts owned by the firm by customers
arising from sales of goods or services in the ordinary course of
business”. It is an accounts receivable represent the existence of open-
account credit by firm to other firms or to individuals.
Accounts receivables are the open account credit sales. That is, no form
acknowledgements of debt liability are taken from the buyers. The
receivablesmanagement is also called as trade credit management. Mana
gement of accounts receivables is nothing but the process of making
decisions relating to the investment of funds in this asset which will
result in maximizing of the overall return of the investment of the firm.
It is to promote sales and profit until that point is reached where the
return of the investment in further funding of receivables is less than the
cost of funds raised to finance that additional cost.
Agricos Agro MultiTech Pvt. Ltd. Satara, Maharashtra. Agrico’s Argo
MultiTech Pvt Ltd is one of the leading and fastest growing brands in
agricultural implements manufacturing in India known for its highly
qualitative products. They always focus on using best quality raw
material and sustainable engineering designs for manufacturing
innovative implements of global criteria. They have successfully
satisfied the needs of their farmer customers in association with massive
dealership network having more than 100 dealers and 20 distributors
across the country.
1.2Management problem:
Organization facing problem on receivable Management. They are
unable to recover the funds from the customers on the time. They extend
credit periods. So, as researcher decided to work on receivable
management.
1.3 Statement of Research Management:
Study on Receivable Management with Reference to Agricos agro
Multitech Pvt. Ltd, Satara
1.4 Objective of the study:
 1. To study existing receivable management practices in Agricos
Agro Multitech Pvt.Ltd.
2. To develop credit standard and credit policies of Agricos Agro
Multitech Pvt.Ltd.
3. To offer necessary suggestion for effective receivable management.
1.5 Scope of the Study:
1.5.1Geograpical Scope:
Present study related to Agricos Agro MultiTech Pvt. Ltd, Satara, near
Sangam nagar, Behind parekh petrol pump, near mane heights, Satara-
Koregaon road, Satara
1.5.2Conceptual Scope:
The Conceptual scope of the study is limited to the topic of study
Receivable Management Meaning, Importance, Factors, Credit policies,
Credit terms.
1.5.3Analytical Scope:
Data has been Analyzed through simple statistical tools such as mean,
percentage, standard deviation, graphs etc.
1.6 Importance of study:
Receivables management serves various purposes, such as determining
an effective credit policy, disputing avoidance, and minimizing bad debt
losses. Customers who make late payments to their respective
company’s risk reduction or revocation of their credit lines.

1.7Research Methodology:
1.7.1 Data Required:
In order to carry out the study attain objectives, the researcher require
the data like- current status of Recivables, their current policies, credit
terms and conditions, problems related receivables. And the secondary
data contains conceptual framework, company profile, mission,
objective etc.
1.7.2 Type of Research:
Present study is descriptive in nature.
1.7.3. Sources of Data:
1.7.3.1 Primary Data Source: As part
of strengthening the study personal contacts are made the officials and
staff members of the finance department in the form of discussion and
collection of reports.
1.7.3.2 Secondary Data Source:
Secondary data refer to information gathered be someone other than the
researcher conduction the current study. Such data can be internal or
external to organization and accessed through the internet or perusal of
recorded or published information. The data are collected from the
annual report, mainly balance sheet, income and expenditure and other
brochures of the company.

1.8 Presentation of Project:

Chapter 1: Introduction to the study and methodology

This chapter deals with introduction of the study, management
problem, statement of research problem, objective of the study, scope of
the study, importance of the study, research methodology of the study
and organization of project.
Chapter 2: Theoretical background
In this chapter include Introduction of Receivable Management,
meaning & concept ,Importance & Benefits of Receivable Management,
Objective, Aspects & Scope.
Chapter 3: Company Profile
This chapter contain Name of the Unit, Location or Address of the Unit,
Brief History of the Unit and Present Position, Strategic Intend of
Organization, Milestones Achieved by Bank, Awards, Certifications, etc.
Human Resource Scenario of Organization,
Future Plans of Organization, Organization chart.
Chapter 4: Analysis and Interpretation of Data
In this chapter, the data collected by researcher is analysed and
interpreted.
Chapter 5: Finding and Suggestions
In this chapter researcher has mentioned finding, suggestion and
conclusion. Besides the researcher has to attach bibliography.
Annexures Bibliography
 Chapter II
Theoretical background
2.1 Introduction:
Management of receivables is a financial term that refers to the
management of an amount owed to a business from a customer account.
A company can sell goods or services to customers on credit for a
defined period. The amount which the company may receive from the
customers is accounts receivable. For example, a company sells goods
worth ₹50,000 to a customer with a credit period of 30 days. If the selling
took place on 1 April 2021 then from this date to the day the bill gets
paid, ₹50,000 is accounts receivable.
In case the customer pays ₹20,000 on 20 April, the overall accounts
receivable post adjustment is ₹30,000. It means if a company sells on
credit to customers, the amount gets added to the overall accounts
receivable. Likewise, if a company receives from customers, the amount
gets reduced from the overall accounts receivables. Professionals like
finance managers can benefit from the management of accounts
receivable as it allows them to increase cash inflow, remove the risk of
bad debts and develop good relationships with customers.
2.2 Definition:
Receivable management refers to the planning and monitoring of debt
owed to the firm from a customer account. Professionals working in
finance and accounting departments such as finance managers may use
this concept to grow sales and increase profits. Understanding the basics
of accounts receivable management can help you learn effective ways to
manage the cash flow of a business. In this article, we define the
management of receivables, discuss its aspects and importance and
describe how you can use it in the formulation of credit policies.

2.3 Objective of Receivable management

Even though management of receivables seems to be simple, but it could

become a very tedious task to manage, depending on the nature of your
business. As your business grows, your processes also evolve and
become more and more complex, thus, the accounting software to
manage your receivables must mould itself to match up to your
company standards and needs. Now to run a business successfully,
what is that one thing that you need? Money! Right? So, to keep your
cash inflow at its optimum, it is crucial that you keep a close watch your
receivables. Thus, below are some of the primary objectives to
receivables management:

2.4 Importance & benefits of receivable management

Management of receivables refers to planning and controlling of debt

owed to the customer on account of credit sales. In simple words, the
successful closure of your order to sales is determined only when you
convert your sales into cash. Till your sales are converted into cash, you
need to manage ‘how much you need to receive? from whom? And
when?

To do this, you need accounts receivables management, popularly

known as a credit management system in place.

Another reason, accounts receivables are one of the key sources of cash
inflow and given the volume of credit sales, a large amount of money
gets tied-up in accounts receivables. This simply implies that so much of
money is not available till it is paid. If these are not managed efficiently,
it has a direct impact on the working capital of the business and
potentially hampers the growth of the business.

2.5 Aspects of Receivables Management

Here are some important aspects of receivables management that a
finance manager may consider to improve the growth of a business:
I. Credit policy
Credit policies are rules and regulations that a company may set while
selling goods or services on credit. A credit policy may comprise
decisions based on credit standards, credit terms and collection efforts.
Determining credit policy may involve several things such as deciding
the total duration of the credit which is the credit period and the cash
discount the customer may get. A well-formulated credit policy can
allow you to do the following things:
  Understand and determine the customers who require credit
 Decide and set the right payment terms for the customers
 Calculate and set the limits on the accounts with outstanding
credits
 Find the procedures which are essential to deal with irresponsible
accounts
ii. Credit analysis
Credit analysis can allow you to determine the creditworthiness of a
particular customer or business. It is the documentation that allows
lending organisations to determine if a customer is eligible for credit.
Credit analysis can play a significant role in risk management and assist
finance professionals in managing portfolios of clients. It may also help
customers by providing detailed insights into what a company expects
from them to offer the credit. During the process of credit analysis,
finance managers may go through the following stages:
 Collecting information regarding the credit history of the client
 Analysing and determining the accuracy of the collected
information
 Making a decision of approving or rejecting the credit application
Importance Of Receivables Management
Here are some common benefits of receivables management:
Allows evaluation of customer credit ratings
Accounts receivables management may allow you to have an in-depth
understanding of the customer's credit rating. It can help you evaluate
the borrowing limit of a customer and their ability to repay the credit
amount. Evaluating customer credit ratings can also be helpful in
minimising credit risk. Many finance managers approve the credit
application after analysing the customer credit ratings and gaining full
satisfaction.
2.6 Scope of receivable management
When you do sales on credit, you would certainly need to keep track of
the due amounts that your parties owe you. All such dues from your
parties will be your outstanding receivables. Managing the outstanding
receivables can be critical to your business because it not only helps to
understand how much your parties owe you, but also helps you to
recover the dues on time and use it for your business, as needed.

 Record and track dues

 Use credit period
 Keep a close eye on long-pending bills
 Payment performance of your customer

CHAPTER III
COMPANY PROFILE
3.1 Name of the unit:
Agricos Agro Multitech Pvt. Ltd. Satara.
3.2 Location or Address of the unit:
Near Sangam nagar, Behind parekh petrol pump, near mane heights,
Satara-Koregaon road, Satara.
3.3 Brief History of the unit:
Agricos Agro Multitech Pvt. Ltd. is a well-known and fastest growing
agro implement manufacturing company headquartered in Satara (MH).
They manufacture Agri Implements as Rotavators, Reverse Forward
Rotavator, Sugarcane Stubble Shaver, 2-Wheeler Tipping Trailer, 4-
wheel Trailers with Brand Name "Agricos".
Agricos Agro Multitech Pvt. Ltd. is a leading agricultural implements
manufacturer company, since 1994 founded by a diligent and visionary
farmer Shri. Tanaji Veer as Sangam Agro Industries at Satara (MH).
Initially the products were Shrikrishna trailer & Shrikrishna front end
dozers.
The company started to develop rotavators from 2014. All our leading
rotavators have been tested in all types of soils. Our R&D team started
developing rotavators, removing drawbacks of other rotavators that
finally came in market as AGRICOS ROTARY TILLER.
3.3.1 Products they manufacture:
They are Manufacturer, Supplier, Exporter of Heavy Duty Rotavators /
Rotary Tillers / Rototillers, Heavy Duty Agriculture Tillers, Agriculture
Tillers, Farm Tillers, Agro Tillers, Sugarcane Rotavators, Light Weight
Rotavators, Light Weight Agriculture Tillers, Orchard Series Rotavators,
Reverse Forward Rotavators, Sugarcane Stubble Shaver / Tractor
Ratoon Manager, Sugarcane Ratoon Manager, Sugarcane Ratoon
Cutters, Ratoon Management Devices, Disc Type Sugarcane Stubble
Shaver, Disc Type Sugarcane Ratoon Manager, Disc Type Ratoon
Manager, Super Champion Rotary Tillers, Single Bottom Reversible
Hydraulic Plough, Double ( 2 / Two ) Bottom Reversible Hydraulic
Plough, Double ( 2 / Two ) Wheel Hydraulic Tipping / Dumping
Trailers, Agriculture / Industrial Water Tankers ( Tractor / Trolley
Mounted ), Tractor Operated Water Tankers, Trolley Operated Water
Tankers, Nano Series Rotavators. Dealership enquiries also solicited.
Our setup is situated in Satara, Maharashtra, India. They provide their
whole range to all over the world, but they majorly target customers
from ALL OVER INDIA, AFRICAN COUNTRIES And ALL MAJOR
FARMING COUNTRIES.

3.4 Strategic Intent of Organisation:

3.4.1 Vision
FOR THE FARMING COMMUNITY
To make available to farmers products of high quality quickly, safely
and efficiently through better customer service, team work and
advanced technology.
To become a renowned and competitive global agro mechanization
solution provider for making agriculture more economical and creating
sustainable value for all its stakeholders.

FOR OUR DEALERS

To become a trusted and profitable key business partner, helping them
grow in their respective businesses.

FOR OUR EMPLOYEES

To improve the quality of life of our employees by providing them
better career opportunities, a safe, secure & progressive work
environment.
To value and nurture trust and cooperation among employees and
motivate and offer fair rewards for performance.
3.4.2 Mission
To manufacture and supply agricultural implements of high quality,
reliability through timely delivery & excellent customer service.

3.4.3 Values
 Honesty and integrity

• Continuous improvement
• Performance
• Quality
• Innovation
• Collaboration