Trade receivables

A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z

Definition

Trade receivables represent the total amounts that a company has invoiced to customers for goods and services that it has delivered but for which it has not yet received payment. As such, trade receivables are included on the assets side of the balance sheet within current assets. They are contrasted with trade payables.

schema

Calculation

It should be noted that from this aggregate, a ratio is determined that is very much used in financial analysis, which is called "customer delays". The formula for calculating this ratio is as follows: Delayed receivables = (Total amount of trade receivables including VAT / Sales including VAT) * 360.

Example: a company has  EUR 1m of trade receivables including VAT; its turnover including VAT is EUR 5m . From there, its DSO ratio is DSO = (1,000,000/5,000,000) * 360 = 72 days of sales including VAT.
This ratio means that on average, the company collects its sales revenue after 72 days.

Interest on trade receivables

Trade receivables are an important item for both companies and their bankers. The cash flow needs depend partly on the good management of these trade receivables.
Thus, all things being equal, a company's cash flow is improved by reducing the amount of its trade receivables. Credit institutions therefore offer solutions that enable the amount of trade receivables to be reduced, in particular through the discounting of documentary credit (trade finance) or the mobilization of trade receivables or the customer item (factoring).

Read also

Our related solutions

Our latest news and insights

5 KEY TAKEAWAYS SHAPING THE BLOCKCHAIN SPACE FROM THE SOCIETE GENERALE-FORGE CONFERENCE
In the heart of Paris, at the French Ministry of Economy and Finance, industry experts gathered for the Societe...
News & Insights
In the heart of Paris, at the French Ministry of Economy and Finance, industry experts gathered for the Societe Generale-FORGE Blockchain event, held during the 6th staging of the Paris Blockchain Week.
5 KEY TAKEAWAYS SHAPING THE BLOCKCHAIN SPACE FROM THE SOCIETE GENERALE-FORGE CONFERENCE
Blue Gold: Tackling Water Challenges through Innovation and Investment
The increasing global demand for water, driven by agricultural and industrial needs, has led to significant pressures on...
Expert views
The increasing global demand for water, driven by agricultural and industrial needs, has led to significant pressures on freshwater resources. This pressure is prompting a complex regulatory landscape that compels corporations to adopt effective water management strategies. Notable projects in mining and steel production exemplify how industries are shifting...
Blue Gold: Tackling Water Challenges through Innovation and Investment
UNIVERSWIFTNET 2025
This year, we are thrilled to participate once more, as an official sponsor of the 21st edition of Universwiftnet...
Expert views
This year, we are thrilled to participate once more, as an official sponsor of the 21st edition of Universwiftnet organised by AGEFI, which will take place on 27 May, at the Palais Brongniart
UNIVERSWIFTNET 2025
More results google link