Accounts Receivable (1 of 4): Control - John M. Leask II CPA/ABV, CVA

Accounts Receivable

Part 1 of a 4 part series

Warning Signs:

    • 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.

Back to The Business Doctor

>>Accounts Receivable (1 of 4): Control
>>Accounts Receivable (2 of 4): Extending Credit
>>Accounts Receivable (3 of 4): Speeding Collections
>>Accounts Receivable (4 of 4): Handling Difficult Collections