Debtor more than 6 months

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Indian banks typically do not consider debtors outstanding for more than 180 days as current assets. This is a common practice, as the usual payment cycle in the market is around 90 days, with specific regulations for MSMEs mandating payments within 45 days. The distinction is crucial for accurate financial reporting and asset classification.

Chaitanyaa

Chaitanyaa (Querist)
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12 September 2024 Banks in India do not consider debtor more than 180 days as current assets. What may be the reason. ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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12 September 2024 Do you mean 180 months !!! or 180 days...
It is general practice to get the payment on or before 45 days. Government has already made such rule for MSME.
Average collection period in market is around 90 days.

Chaitanyaa

Chaitanyaa (Querist)
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12 September 2024 Sir I mean 180 days.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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12 September 2024 Yes, I have replied based on that.

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