Abstract
The Role of Controlling Credit Sales and Receivables in the Wood Processing Companies of Tuzla Canton, Bosnia and Herzegovina
Highlights
When buying products and services, what customers are most interested in is the possibility for deferred payment, or credit sales
By analyzing the basic products or services offered the by the wood processing companies in Tuzla Canton, we found out that 50 companies in the sample were divided as follows: 13 of them are furniture factories, 11 companies deal with wood processing, seven companies produce joinery, six companies deal with final processing of wood, four companies produce paper, while nine companies offer some other basic product or service and include pellet production, sawmills, band saws, etc
This allowed us to conclude that the establishment of controlling credit sales and collection of receivables will have the function of increasing profitability
Summary
When buying products and services, what customers are most interested in is the possibility for deferred payment, or credit sales. As customers are driven by the time value of money which assumes “a dollar in the present is worth more than a dollar in the future”, they see credit sales financing as an important segment of their decision on purchase. From the accountancy perspective, when a customer is approved a credit, accounts receivable occur. Such receivables can include trade credits, if a credit is approved to a company, and consumer credits if a credit is approved to an individual [2]. Receivables are the money which customers owe to companies as they bought products and services on credit.
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