What is the minimum expectation for Accounts Receivables?

What is the minimum expectation for Accounts Receivables?

• A. Less than 10%
• B. Less than 7%
• C. Less than 5%
• D. Less than 3%

Answer: (C)

The minimum expectation for Accounts Receivables being set at less than 5% is based on the need for a company to maintain an efficient cash flow and minimize overdue accounts. By establishing this threshold, businesses aim to ensure that the vast majority of their sales are collected in a timely manner, reducing the risk of bad debts and improving their overall financial health. Lower percentages indicate a healthier accounts receivable situation, allowing for better cash management and operational efficiency. This expectation is critical for a Service Sales Representative, as it underscores the importance of maintaining effective customer relationships and ensuring timely payment for services rendered.

The minimum expectation for Accounts Receivables being set at less than 5% is based on the need for a company to maintain an efficient cash flow and minimize overdue accounts. By establishing this threshold, businesses aim to ensure that the vast majority of their sales are collected in a timely manner, reducing the risk of bad debts and improving their overall financial health. Lower percentages indicate a healthier accounts receivable situation, allowing for better cash management and operational efficiency. This expectation is critical for a Service Sales Representative, as it underscores the importance of maintaining effective customer relationships and ensuring timely payment for services rendered.