Part 3 of a 4 part series
- Receivables exceed 50 days outstanding.
- Days receivables outstanding increases significantly.
- Significant decrease in sales/receivables.
Steps to Improve: SPEEDING COLLECTIONS
- Get advances, deposits, progress payments whenever possible.
- Bill before or soon after delivering goods or rendering service.
- Shorten the time between placing the order and the shipping date.
- Shorten the time between shipping date and date the customer gets the invoice.
- Ask your customers to pay by invoice rather than by statement.
- Use stamped pre-addressed envelopes to speed payments.
- Resolve customer-billing disputes promptly.
- Actively pursue collection using written policy enforced consistently.
- Test actual implementation of collection policies looking for improvement.
- Shore up listless collection policies.
- Hold customers to payment terms to earn discounts.
- Charge interest on delinquent accounts.
- Use fax machine to speed collections and trim expenses.
- Start sending out semi-monthly statements.
- Collect cash where you can be wire transfer and e-mail.
- Use third party credit (credit cards, direct finance) instead of house credit if you can.
- Utilize major credit cards rather than open accounts where practical.