What is float in receivables management?
Float is the time gap in the receivables management and these can be in the following forms:
1. The frequency with which the bills or invoices are raised in favour of the customers.
2. Delay at the administrative end for raising the bills or invoices in favour of customers.
3. Period of credit offered to customers.
For an effective receivable management all the important measures need to be taken to reduce the time gaps between receivable management. From this point, the following measures can be taken into consideration:
1. Attempts should be made to reduce the time gap between the payment of the invoice and the time when bills or invoices are raised.
2. Bills or invoices should be raised immediately after the dispatch of material or rendering the service.
3. Credit period offered to the customers should be kept as low as possible.