Part 1 of a 4 part series
- Receivables exceed 50 days outstanding.
- Days receivables outstanding increases significantly.
- Significant decrease in sales/receivables.
Steps to Improve:CONTROL
- Have a formal written receivables policy.
- Compare days outstanding to industry standards and/or general business norm. If accounts receivable = 45-50 days outstanding, be there.
- Compare bad debt ratio to industry standards and company’s past history.