What is the main formula I need to know?

You must know the formulas for Receivables Days: (Average Trade Receivables / Credit Sales) x 365, and Payables Days: (Average Trade Payables / Credit Purchases) x 365.

How many marks is a working capital question usually worth?

Working capital management questions, including receivables and payables, often appear as a full 20-mark question in Section C, or as smaller components in Section A and B.

What if my calculation is wrong, do I lose all the marks?

No, the ACCA uses an "own figure rule". If you make an early calculation error but use that incorrect figure correctly in subsequent steps, you will still earn the marks for the later steps.

How do I know if the current receivables level is "good" or "bad"?

You must compare it to something. An examiner will expect you to compare the receivables days ratio to the company's stated credit policy, the prior year's ratio, or an industry average.

How many hours should I spend on this topic?

If you're working full-time, aim for 2-3 focused hours this week. Spend one hour learning the formulas and concepts, and two hours practicing questions. Quality of focus is more important than quantity of hours.

Am I ready for the exam if I can answer a question on this?

Being able to answer a receivables and payables question is a great sign of readiness. It shows you can handle calculation, interpretation, and application, which are key skills for the FM exam.

FM Financial Management

Receivables and Payables Management: A Guide for FM

Master receivables and payables management for your ACCA FM exam. This guide covers key ratios, policies, and a worked example to help you pass.