Accounts receivable forecasting is particularly challenging as it is entirely in the client company’s hands. While payment terms are agreed upon, customers might not always adhere to them, adding an element of unpredictability to the process.
Further challenges that make forecasting A/R difficult include:
In the case of A/P, the forecast is accurate in the short-term, up to the next 2 to 4 weeks.However, it is in the longer run that the accuracy takes a hit because of uncertainties revolving around payments.
Challenges when forecasting A/P are:
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