Trade receivables

Money customers owe for goods already delivered. It is the balance-sheet trace of the accrual principle, and it is where revenue goes to wait.

The garment exporter with ₹4,800 crore of revenue and ₹640 crore of receivables is waiting about 49 days for its money.

Receivables growing faster than sales is the most reliable early warning in accounts. It can mean a real shift to larger customers with more bargaining power, or a push of stock into distributors at the end of a quarter, or customers who can't pay. All three matter, and the ageing schedule distinguishes them.

Indian filings now present the ageing schedule in fixed buckets, which makes the comparison across years and across companies straightforward. What you want is the share of the balance sitting beyond six months. A company whose total receivables grew 20% while the over-six-month bucket grew 60% hasn't gained customers with more bargaining power; it has stopped collecting from somebody. It also separates amounts due from related parties and from directors. Any large or growing figure there is a governance question.

Look for the provision for doubtful debts alongside. A company whose receivables ageing is deteriorating while the provision stays flat is telling you two contradictory things at once, and one of them is wrong.