Analyzing the relationship between collections management and corporate financial stability: a review of the literature
DOI:
https://doi.org/10.34117/bjdv11n8-057Keywords:
collections management, accounts receivable, financial stability, working capital management, credit recovery, corporate financeAbstract
This article reviews the academic literature on the relationship between collections management and corporate financial stability. By synthesizing theoretical and empirical studies, it highlights how effective accounts receivable practices contribute to liquidity, mitigate financial risk, and enhance profitability. Evidence from working capital management research demonstrates that efficient collections shorten the cash conversion cycle, reduce exposure to bad debts, and stabilize cash flows, particularly during periods of financial stress. The review also identifies gaps in the literature, including limited research on technological innovations in collections processes and cross-country institutional differences. The findings suggest that collections management should be viewed not only as an operational activity but also as a strategic lever for financial resilience and sustainability.
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