A Conceptual Study of Trade Credit Management on SME’s | Abstract

Global Journal of Commerce & Management Perspective
Open Access

ISSN: 2319-7285


A Conceptual Study of Trade Credit Management on SME’s

Prof. Binny Rawat & Dr. Govind Dave

Business finance includes both types of funds long term as well as short term which required for daily expenses in the business and also known as working capital. Working capital management includes management of inventory system of firm, cash management, accounts payable management, and receivables management, which means trade credit management. Receivables are one of the largest assets of the business enterprise. The level of receivables will be based on certain factors like, credit policy of the firm, credit period, discount and collection policy. Trade credit confined to receivables arising from transaction between companies. For small businesses the efficient receivables is a critical component and one of the most important elements of working capital management. Proper management of receivables will lead to increase in sales and profit enhancement. The Objective of the study is to get the conceptual clarity of working capital and trade credit, and how this affects SME’s