International Journal of Industrial Engineering and Management (IJIEM), Vol. 10 No 1, 2019, pp. 93-103 Available online at www.iim.ftn.uns.ac.rs/ijiem_journal.php ISSN 2217-2661 IJIEM http://doi.org/10.24867/IJIEM-2019-1-093 The Role of Controlling Credit Sales and Receivables in the Wood Processing Companies of Tuzla Canton, Bosnia and Herzegovina Emira Kozarević Associate Professor, Faculty of Economics, Univerzitetska 6, 75 000 Tuzla, Bosnia and Herzegovina, emira.kozarevic@untz.ba Adisa Delić Full Time Professor, Faculty of Economics, Univerzitetska 6, 75 000 Tuzla, Bosnia and Herzegovina, adisa delic.kozarevic@untz.ba Mirzet Omerović Bank officier, Raiffeisen Bank, 15 Maja bb, 75 000 Tuzla, Bosnia and Herzegovina, mirzet.omerovic@raiffeisengroup.ba Received (05.12.2018.); Revised (23.01.2019.); Accepted (26.02.2019.) Abstract When companies sell goods/services, they may request cash prior to or at the delivery or they may offer deferred payment. The decision on credit policy is a trade-off between the benefits gained from increased sales and the costs of approving credit. Based on the appropriate analysis of reports, controlling should help the management to bring such business decisions aimed towards customers and to take all the necessary measures for obeying the appropriate legal regulations. This way, controlling may influence better liquidity of a company, which includes faster cash turnover, payment to its suppliers, lower outstanding accounts, and better profitability. Apart from the general importance of controlling credit sales and collection of receivables, the article examines the position and the role of controlling in the companies operating in wood processing as the fastest growing industry in Bosnia and Herzegovina. Keywords: controlling, credit sales and receivables, wood processing companies, Tuzla Canton 1. PREVIOUS RESEARCH ON CREDIT SALES AND COLLECTION OF RECEIVABLES When buying products and services, what customers are most interested in is the possibility for deferred payment, or credit sales. As customers are driven by the time value of money which assumes “a dollar in the present is worth more than a dollar in the future”, they see credit sales financing as an important segment of their decision on purchase. Money is not the purpose of entrepreneurial organization existence but rather the “oxygen” needed to achieve that purpose. In the spirit of the saying “it’s better safe than sorry”, liquidity and regular collection of receivables are primarily ensured by prevention, timely usage and understanding of available information, as well as organized procedure based on laws and regulations for communication with customers[1]. In the real world, it is unrealistic to expect that customers will always use cash for certain products and services. For the majority of companies, credit sales financing or “investment into receivables” is a regular activity. Individuals or companies that buy on credit actually borrow from suppliers; they save money today and pay later. From the accountancy perspective, when a customer is approved a credit, accounts receivable occur. Such receivables can include trade credits, if a credit is approved to a company, and consumer credits if a credit is approved to an individual [2]. Receivables are actually the money which customers owe to companies as they bought products and services on credit. It can be stated that receivables are seen as the assets with certain value and as such, they are registered as an important element in company’s balance sheet since all business