The effective management of accounts receivables requires financial managers to:

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Reviewing the credit history of new customers is important in determining their ability to pay their debts on time and avoid default. This allows companies to establish appropriate credit terms and ensure the timely collection of accounts receivables. Providing prompt cash payments to suppliers, allowing customers more time in paying their past due accounts, and refusing bank-issued credit cards may not necessarily contribute to effective management of accounts receivables.

The Effective Management of Accounts Receivables Requires Financial Managers To