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Aecon Group Inc

In: Business and Management

Submitted By poshnails
Words 617
Pages 3
Alternative Four: Efficiently collect the receivable
Another alternative is to efficiently collect the receivable due to the problem that Aecon is below industry standard in terms of the length of period. Through the financial ratios, the efficiency of Aecon currently has a receivable turnover of 5.45 and a receivable collection period of 38 days. The goal is to increase the turnover of receivables to 6 meaning collecting money from clients sooner. The industry standard for receivable collection is 30 days. If Aecon's strategic mission is to be the Canadian leader in the industry, then meeting and surpassing the industry standard is imperative. With the external environment having a global threat of rising oil prices and financial risks with high fixed costs, this alternative proposes Aecon the solution to combat these threats by having cash readily available. Although Aecon's strength is their reputation, a major weakness is suffering from collecting receivable on time relative to its competitors. This alternative aligns with their strategic intent to remain profitable by focusing on an area that needs to be improved. This alternative can be explored into two ways: outsource an accounts receivable agency or training the current staff to timely collect the debt.
By outsourcing a company to do our account receivables, this will mean less waiting time for cash and more time spent on growing and building and growing the company.
Pros Cons
• Aecon can invest the free time, space and money into improving company focus

• Immediate access to cash

• An account receivables outsourcing company will first conduct a credit check on your clients in order to minimize any risk of loss.

• Reduce operating costs and office space requirements • Costly service: An outsourcing company will charge a small fee, sometimes a flat rate and other times a percentage of the

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