Management of receivables in SMEs in the Czech Republic

Abstract

Management of receivables is an important component in the system of companies' management. Management and the financial management and other theoretical disciplines provides many useful knowledge and recommendations about how to manage this area of companies activity, but there is only little knowledge of the conditions for their application in the SMEs and the ways how small and medium-sized enterprises (SMEs) manage this area in real practice, which methods and forms they use for management and collection of receivables, how they secure their receivables, what problems they solve. The research among the Czech companies carried out of the University of Finance and Administration in Prague bring some interesting findings that may become the basis for recommendations on how to improve credit management system in these firms. Main weaknesses have been detected in the monitoring of solvency and financial position of business partners, in insufficient or none security of receivables, in insufficient law enforcement, in a limited use of sophisticated management practices, in co-operation with collecting agencies. The results of this research are presented in this article.