Accounts Recivable Management plays a pivotal role in improving the working capital. Accounts Receivable Management includes credit standards setting, Credit term strickness or relaxation & its Collection management policy. Credit standars & Collection management policies related to Accounts Receivable is well settled but company is facing difficulties in stricting or relaxation credit terms. Therefore, the Company is interested to change the credit policy, which would result in a cutting down the processing pace of the average collection period from 30 days to 60 days. The company's selling price, Variable cost and total average cost per unit is Rs 30, Rs 23 and Rs 25 respectively. The relaxation in credit policy was expected to increase Sales volume from existing level of 100,000 units to 125,000 units. The collection charges will also be increased from Rs 10,000 to Rs 14,000. The relaxation in credit policy will also increase the bad debt losses from 1 % to 3 %. The Corporate manager aimed at a return of 25% on investment or borrowing. On the basis of net annual benefit / (or cost) suggest or advice the company for implimentaion of credit policy.