Accounts Receivable and Credit Management
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Questions and Answers

What is the primary focus of customer profiling model?

  • Analyzing customer credit exposure
  • Analyzing customer invoice risk
  • Analyzing customer credit limit
  • Analyzing customer payment time and terms pattern (correct)

What can be predicted by analyzing the trend of payments split into categories of early, on time, and late payments?

  • Customer credit limit
  • What can be expected out of open invoices in the future (correct)
  • Customer credit exposure
  • Customer invoice risk

What is the purpose of considering the grace period in customer profiling?

  • To analyze customer credit limit
  • To identify high-risk customers
  • To analyze customer invoice risk
  • To know the impact of float days on late payments turning into compliant payments (correct)

What can be identified through comparative analysis of credit limit vs. credit exposure at the customer level?

<p>Customers who are backlogging on high amounts and can turn into a potential source of financial risk for the company (B)</p> Signup and view all the answers

What is the purpose of creating invoice process flow diagrams?

<p>To analyze preferred sources and terms of payments, helping contract makers know more about how future invoices can be drafted to optimize payments with least resistance from customers (B)</p> Signup and view all the answers

What is analyzed alongside unearned discounts to establish a correlation between deductions and associated invoice risk?

<p>Compliant and non-compliant payments (B)</p> Signup and view all the answers

What is derived from customer profiling?

<p>Invoice risk modeling (C)</p> Signup and view all the answers

What can be known through invoice risk modeling?

<p>More about customer payment behavior and problematic areas where the invoice is not moving as expected (D)</p> Signup and view all the answers

What is the purpose of analyzing customer payment behavior?

<p>To know more about customer payment behavior and problematic areas where the invoice is not moving as expected (B)</p> Signup and view all the answers

What is the correlation established between unearned discounts and?

<p>Associated invoice risk (D)</p> Signup and view all the answers

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