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FM

The management of receivables Introduction - ACCA Financial Management (FM)

VIVA Subject Guide
YouTube video

23 Comments

  1. packsonnegroopey
    can it be used for 2026 and 2027 exams?
  2. John MoffatTutor
    Yes it can - the syllabus has not changed for this topic :-)
  3. Adnan
    Can this be used for DEC 2025 attempt?
  4. John MoffatTutor
    Yes it can :-)
  5. s
    hi are these up to date for dec24 session?
  6. John MoffatTutor
    Yes of course :-)
  7. Asif
    Greetings.

    Sir I was confused in your Invoice discounting explanation.

    First you said the company ‘sells’ the invoice to the Bank. Then you followed up with - the Bank ‘lends’ money in return. Either it should be the company sells and the bank purchases the invoices in cash; or it should be the company borrows and the bank lends.
    So which one is it ? If it is borrowing, then whats the difference between discounting and factoring, for in factoring the factors lends you some money in advance.

    Also, if it is the bank purchases and the company sells the invoice, then should I expect this to be like the no recourse factoring option where the bad debts will be the bank’s issue from now on - because the rights have been transferred to them as the company ‘sold’ off and not “lent” the invoices to the Bank.
  8. John MoffatTutor
    The bank pays the company and buys the invoice - they then take the money from the receivable. They are not lending the money but the reason I used the word is that they are effectively charging interest because they pay the company less than the amount of the invoice. So for the company it is similar to if they had borrowed the money.
  9. King
    So umm sorry, but is that not like hedging? What’s the difference between invoice discounting and hedging of receivables?
  10. John MoffatTutor
    No. Hedging is done to reduce risk and may be used for receivables in a foreign currency (as explain in the lectures on exchange rate risk). Invoice discounting is simply a way of getting cash sooner and is useful if the company has cash flow problems.
  11. mandeep
    I am watching these lectures for the June 2022 session, are they up-to-date ???
  12. John MoffatTutor
    Yes they are.
  13. Abubaker
    Awesome, Really Appreciate it Sir.
  14. Sonal
    hello, I am watching this lecture in May 2021. Is this lecture updated according to the syllabus
  15. John MoffatTutor
    All of our lectures are up-to-date for the current syllabus.
  16. Sonal
    thnku sir
  17. adnanjaved123
    Appreciated
    excellent efforts....
    from Pakistan.
  18. Asher
    Thank you sir. Very straightforward lecture
  19. John MoffatTutor
    Thank you for your comment :-)
  20. Ansu Koroma
    Receivables should be managed in the light of competition as reducing receivables days will result in loss of business with customers. Nonetheless, several factors should be looked at and also making use of invoice discounting (selling invoices) and factoring (employing the service of a third party for receivables management)
  21. glodan123
    Sir, I think you mean factor with recourse (not without recourse as in your answer above) is where the company suffers any irrecoverable debts.
  22. John MoffatTutor
    Thanks - it was a typing mistake and I have now corrected it :-)
  23. John MoffatTutor
    I do explain this in the later lecture (and in the free lecture notes) - this is only the introductory lecture.

    Non-recourse (or without recourse) is where the factor suffers any irrecoverable debts, whereas with recourse factoring is where the company suffers any irrecoverable debts.

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