Reasons for long accounts receivable period in building materials sales enterprises

Because accounts receivable are current assets, all accounts receivable aged more than 1 year can negatively impact a company's operations, and the higher the age of the accounts, the greater the risk of bad debts.

Unless the company due to the industry and business characteristics, such as large equipment or engineering payback may be more than 1 year, and there are few cases of bad debts occurring before, in addition to this, if the company has a large number of accounts receivable aging more than 1 year, or even more than 3 years, which need to cause investors to be extra vigilant, the high age of accounts receivable ultimately form bad debts and lead to a significant decline in the company's performance, but also to consider in the Whether it is reasonable to sign a contract to agree on a billing period.