CHAPTER 5: RECEIVABLES MANAGEMENT. Objectives. The objectives are: • Provide a point of reference to the Payments tab on the Customer. Card window. PDF | This paper develops and tests hypotheses that explain the choice of accounts receivable management policies. The tests focus on both. Receivables management, also termed as credit management, deals with the formulation of credit policy, in terms of liberal or restrictive, concerning credit.

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Accounts Receivable Management Best Practices John G. SalekJohn Wiley & Sons, Inc. Accounts Receivable Management B. Accounts receivable has been singled out as an important area that deserves close management at- tention because these accounts affect the day-to- day cash. Receivable Management What is Revenue Cycle Management? .. http://

Project Implementation and Govt Regulatory functions.. Variations of this The Cash basis shall be used whenever payment for goods or services is to be received in advance of their provision. Revenue Generated from sales are credited to various departments to support their ongoing operations. Energypac Electronics Limited Page 1. The volume of credit sales. Cash basis or Accrual Basis.

The paying practices of credit customers.. The terms of credit granted to customers.. General Sales a Corporate.

Accounts Receivable Management & Credit Policy.pdf

Others are Non-enrolled shop. Regulations are classified into two major categories: Before allowing credit sales the concerned sales person will assess the customer and the concerned manager will approve it on the basis of Category of business.

Strength of Solvency. Credit period shall not exceed the period stated in the Schedule-I. Length of Business History. Credit limit is allowable upon receipt of any security in the form of: Every Customer Retail. Reporting and its Responsibilities Energypac Electronics Limited Page 3. After assessing the customer. Credit limit to be restricted in Software and it has to be followed strictly.

The Concerned sales person and immediate supervisor will be jointly responsible for recovering the receivable against every single invoice before the expiry of Credit period allowed. The management may deduct if thinks fit. Retail Credit against sales directly to shop owners Inter-companies Companies under the umbrella of Energypac Firstly, you determine your strategy and then you specify the appropriate procedures.

Step 1. Determine the strategy Which customers do you accept and under which conditions? Which customers do you monitor? Who should no longer be accepted, and when is the exit?

Step 2. Prepare appropriate procedures What is your invoicing process like? What is your invoice like? When do you remind a customer by phone? When do you remind a customer in writing? What does the reminder look like? When do you engage a debt collection agency? When will you start legal proceedings? What is the role of your employees in this respect? Will you choose outsourcing or in-house management? The major benefit of this approach is to identify problems with an invoice prior to the due date, in the hope they can be resolved quickly and payment received within terms.

An invoice can be sent in a few minutes. Why wait for an invoice to be 5 to 10 days past due before finding out the customer does not have it?

If this problem is identified and resolved 10 days prior to the due date, it is highly likely that the payment will be received within terms.

The basic principles of proactive collection contact are: If no problems exist, inquire if the invoice is scheduled to be paid by the due date. It also educates the customer that you are serious about enforcing your payment terms. Ask for the payment on the due date.

Some customers will balk at answering questions about invoices not 70 Accounts Receivable Management Best Practices yet past due. Resolution starts with identification. Some will be strongly resentful and may have to be exempted from proactive contact. A good way to start proactive contact is to call customers with some past due invoices.

Inquire about the past due invoices first, then inquire about a few large individual invoices that will become due within 10 days. Over time, proactive contact can be expanded to the majority of the large accounts, addressing large invoices 10 to 15 days from the due date. A suggested script for proactive collection contact is: If not, try to get it advanced so it will meet the payment terms.

Customer Contact Methods The most effective method of customer contact is made via telephone, which can elicit a timely or, it is hoped, immediate response. Once you have the proper person on the phone, you are well positioned to secure a commitment to pay or determine the reason for nonpayment. In our experience, e-mail is a very effective method of communicating with accounts payable departments.

Many people respond more promptly to e-mails than voice mails, and the e-mail message is much better at conveying invoice numbers, amounts due, and so on. Collection letters have limited effectiveness. They are best used with low-priority, small-balance accounts that probably will not receive a call or personalized e-mail. For such accounts, a collection letter is better than no contact at all.

A small percentage of letters do elicit a payment or report of a dispute. Collection letters also help when escalating Receivables Asset Management 71 action with a delinquent customer. Strong action is appropriate when it follows repeated collection contacts that were ignored.

It is easier to justify holding orders when you can cite prior collection letters and calls to the customer. In the final analysis, the justification of collection letters is that they are better than nothing. With praise like this, who needs criticism? Since collection letters are of low value, they must be automated to ensure that the time and cost expended on them is minimal. They always involve some manual processing. Truly automated means: The more past due an invoice, the more urgent tone in the letter.

Letters should be phrased in a customer service—oriented manner, but call for prompt, specific, action: Company letterhead should be used. They are simply inserted in the envelopes and mailed promptly. This is especially true when there is a lot of clutter in the receivables portfolio. Statements of account are similar to collection letters with these differences: Part of the mission of receivables management is to help customers maintain their credit accounts with you in the best possible condition.

Clearing open items, especially clutter items, is an important part of the service provided your customer. Statements display all open items, enable customers to see the entire account, and enable them to apply open credits or payments to open debits. As a result, most of its customer statements of account were inaccurate, with many displaying the remaining amounts of misapplied customer payments. The manufacturer mailed 10, customer statements in a single batch every month.

The volume of incoming calls that resulted overwhelmed the collection and customer service staff. Most of the calls were from very small balance customers, and many were to request a refund of the open credit transactions on the account. Cash flow decreased severely. Receivables Asset Management 73 work if their account is selected for verification as part of an audit. Sending statements every month also helps justify escalation when needed. Customer visits are a valuable tool in developing and reinforcing a positive rapport with the customer.

They should be utilized subject to expense constraints, as they are time consuming and can involve travel expense. Customer visits have two objectives: An end-of-month account statement In all cases, the document must be sent well in advance so the customer can prepare a response.

In addition, you must be make it clear to the customer that you expect the research to be completed before the meeting, so the meeting will focus on resolution and clearing of the open items.

Customer visits should be conducted by the collector, accompanied by the sales representative. An invitation should be extended to the collection manager as well. Preparation for the visit should include thorough review of these materials: Items that have cleared should be identified the day before the meeting to save time during the meeting. After the meeting, the collector should send an e-mail or letter thanking the customer for his or her time and summarizing the actions agreed to by both parties.

Then the actions should be initiated as soon as possible to reinforce credibility with the customer. Preparation for Customer Contact Best Practice preparation for a call or e-mail involves the following steps: Select a customer to contact based on the prioritization methodology next largest open amount or high risk.

Retrieve the contact name and phone number from your receivables system. Review the status summarizing the total amount due in each aging category, so you can state the amount past due and amount falling due in your opening remarks.

Receivables Asset Management 75 5. Review the notes of prior conversations in the system to refresh your memory on recent conversations. Review the last reconciliation pack sent if applicable. Note any clutter transactions unapplied cash, short payments you intend to discuss with the customer. Quickly formulate the request you will make of the customer, and assemble supporting documents. You are now ready to make the call or e-mail. For the preparation of a contact for collecting short-paid invoices: Assemble supporting documentation.

Make the call or e-mail.

Execution of the Customer Contact To reiterate, customer contact can be made by phone, e-mail, or fax. It is essential that collection contact be made with a person at the customer who can produce the desired effect—that is, pay the invoices and provide information as to their status. The first contact is usually with the accounts payable department. A suggested script to be modified to fit your own style is: Our records show you have xxx dollars past due and xxx dollars falling due in the next few days.

Do your records agree? It may be helpful to send a copy of a statement of account to facilitate the discussion. If a customer is missing invoices, provide the customer with a copy. If invoices are disputed, get complete information about the nature of the dispute so you can initiate its resolution. If there is a disagreement as to the due date of the invoices, carefully explain the payment terms and the due dates.

If necessary, provide documentation contract to support the agreed payment terms and their interpretation. The objective is to get the customer to include all invoices that are past due and falling due in the next payment. This is known as total inclusion. The amount paid may be less than the sum of all the invoices because of deductions, but ensure all invoices are paid. If the customer agrees with the amount and due dates, secure a commitment as to the date, amount, and invoices to be paid.

Upon completion of the call, take these five steps: Enter into the collection notes the results of the contact, including: Enter your initials, the date, and the name of the person s to whom you spoke. Utilization of standard abbreviations can accelerate this process. Enter into your diary follow-up mechanism the date of the next action e.

If appropriate, confirm the agreed actions in writing or e-mail. Fulfill actions you have promised within 48 hours. Receivables Asset Management 5.

If you cannot get through and you get voice mail: Negotiation Skills and Empowerment Best Practices includes empowering collectors to negotiate and to concede charges during negotiation.

Limits must be placed on the amount that can be conceded. Concessions can also be limited to late payment fees and unearned prompt payment discounts. However, to achieve best results most efficiently, a collector must be empowered to write off certain amounts.

This empowers collectors with the customer and eliminates the time required to secure approvals. Negotiation plays an important role in collections. However, it is not the classic, pure negotiation that transpires between a willing downloader and willing seller. It is different because: You are merely asking the customer to abide by what has already been agreed. The seven key steps in collection negotiations are: Prepare by reviewing the status of the account, prior actions and discussions, and what you wish to achieve.

Decide what you will concede. If the customer does not commit to the opening position, propose an alternative, and look for a willingness to bargain.

Trade items of low value to you that may be of high value to the customer. Agree to all conditions. Confirm in writing afterward. Payment Plans Payment plans should be negotiated only when the customer cannot pay all the past due amount within a day time frame. The objectives in negotiating a payment plan are: Collections staff members should discuss all impending negotiations for payment plans in advance with the collection manager, whenever possible, to agree with the parameters of the payment plan.

Once negotiations begin, the collector must be empowered to unilaterally reach an agreement within the agreed parameters with the customer. All payment plans must be confirmed in writing. In addition to the cost of funding the slow payments and the risk of bad debt loss, problem customers inflict a high cost in servicing their accounts. This cost is reflected in increased collector time, but also in the time of credit, finance, sales, and executive management.

Imany, Inc. The best way is to do business with them differently. Instead of selling on open account and then chasing them for past due receivables, sell them on a more restricted basis, such as: Implementing any of these terms may result in lower sales to problem accounts. This risk of lower profit earned on the sales must be weighed against the cost, management time, and risk of bad debt loss of the existing mode of business, and is best made by executive management.

Payment plans see above are useful for reining in a seriously delinquent problem customer. Unfortunately, as 80 Accounts Receivable Management Best Practices the oldest invoices are being paid over a period of time, ongoing shipments begin to age and quickly become past due.

The first rule in dealing with problem accounts is that the amount of payments must exceed the level of sales, to ensure the total balance is continuously decreasing.

This will reduce the amount of future past due debt to be dealt with. This technique may not always result in an absolute greater amount of payments, but often it can. Additionally, it continues the urgency caused by seriously past due invoices, while decreasing the total exposure. Finally, the escalation protocol or collection timeline prescribes the actions to be taken for a seriously delinquent customer. When the above-mentioned techniques fail, the escalation protocol must be followed.

In our experience, many companies hope and wish for improvement with problem customers, but in most cases, the exposure increases as time advances. Delaying order and shipment hold usually results in higher exposure and a bigger problem.

If substantial improvement is not seen, and commitments for short-term payments are not secured, it is best to face facts and refer the account to a collection agency or attorney. These third parties are most effective the earlier they take over an account. For a number of reasons credit reporting, experience , they can exert pressure and achieve results that the supplier company cannot.

The suppliers that utilize third parties first usually achieve the best results. If you are the tenth supplier to refer an account to a collection agency, it has little impact. If you are the first or second, your chances of collection are much better. The best way to ensure that the collectors are using the Best Practices is through two primary actions: Have the supervisor sit with each collector for two to three hours while the collector is making collection calls.

The preparation, execution, and post-call follow-up can be observed and constructive suggestions for improvement offered. Receivables Asset Management 2. The portfolio review is a review of the status and next steps to be taken with a group of accounts. Usually the accounts selected are the larger ones or the problem accounts.

It is also a good practice to select some medium and smaller accounts to test how well the portfolio is being penetrated. The portfolio reviews will enable the supervisor to obtain a perspective on how well collectors move accounts to a satisfactory condition, if their follow-up intervals are too long, how well they are pushing coworkers to resolve issues, and so on.

Key Points The six key points to remember about the collection process are: It is a process and it must be well defined. The collection timeline helps in the definition and in communicating and explaining it within your organization. It must be supported throughout the organization, not just by finance.

It is designed to execute the portfolio strategy and, as a result, should be tailored to the major segments of the portfolio.

Weekly portfolio reviews are essential to achieving top performance from collectors. Proven fundamentals apply to virtually all portfolio segments. More customer contact is better than less. Earlier contact is better than later. National Accounts Approach A national account is defined as a large, important customer that provides a significant portion of total sales and profit.

Typically they are large Fortune —size companies, with multiple locations or ship-to addresses , and a contract governing the trading. Often they are very creditworthy.

Losing such a customer would be a serious adverse event 82 Accounts Receivable Management Best Practices for a company. The objective of receivables management for national accounts is to provide premium financial service to them and to maximize cash flow from them.

In an effort to retain and grow revenue with such customers, companies will provide a premium level of service. Premium service can take many forms, but in revenue cycle operations, it often includes some or all of these areas: This enables the staff members to specialize in the needs and procedures of the customer s and develop a rapport with their counterparts within the customer.

Specialized staff members are often used for government customers that have particular and inflexible contracting and invoicing requirements. Order fulfillment, invoicing accuracy, and dispute resolution are enhanced by specialized staff members.

Such an approach is designed to recognize the unique characteristics and value of national account customers. The approach includes: Backup staff members were also designated and a supervisor assigned to allocate workloads to ensure the standard was met. Receivablespute Asset Management 83 clearing, application of open credit memos and pay- ments, and the overall clearing of clutter.

Accounts Receivable Management: Best Practices

Successful national account administration enables companies to manage large revenue streams and receivable assets with excellent results. Conversely, mismanagement of national accounts administration can result in receivables nightmares that can be disproportionate to the size of the customer. Excellent management of the receivables asset is a broad objective. Two common examples of narrowly defined objectives are: Reducing the value and number of seriously aged open items 2.

Maximizing cash collections over the next days Special collection efforts focus additional resource and management time on their objectives. By concentrating resources and attention on a limited task, progress can be accelerated and results improved. Alternatively, additional resources can be deployed to maintain activity levels in all areas. Often, special efforts are initiated to solve problems that have built up over a long period of time and are not being resolved satisfactorily in the normal course of business.

Two special collection efforts directed at common receivables management problems are described next. Best Practices Reconciliation and Recovery This effort or program is directed at substantially reducing the value and number of aged open items. Often these aged items are defined as 90 to days old, and can be found in the far right column of the receivables aging report.

These receivables are at the greatest risk of bad debt loss, usually trigger a high level of provisioning in the bad debt reserve, and draw a lot of senior management and auditor attention. These items pose a difficult dilemma: If they were easily cleared, it would have been done before they reached the advanced age.

It will take much time, effort, and cost to try to collect and clear them. However, their collectability is low, especially if there are many clutter transactions included. So companies are faced with the prospect of expending a great deal of resources for a relatively small payback.

The importance of receivables management

On the other hand, to just write them off is too costly. If the collection staff is assigned to devote a substantial portion of its time to work these accounts, cash flow will decrease as the normal collection effort will be diminished. How can this dilemma be solved?

The answer is a reconciliation and recovery program. A reconciliation and recovery program: Customers with less than eight such transactions and customers with just whole open invoices are excluded from the program. Such accounts can be handled by the collectors in the normal course of collections without consuming too much of their time.

The format is called a reconciliation pack, and contains these elements: These procedures are developed by an expert on staff who can document the fastest, most efficient method of assembly.

Decision points are used to maintain the cost efficiency focus. An example of a decision point is if a copy of a one-yearold invoice for a small dollar amount cannot be retrieved, then it is best to write it off rather than expend inordinate amounts of time searching. Similarly, small clutter items may be unilaterally written off to reduce the time and expense of reconciliation pack assembly. This saves collectors an enormous amount of time, allowing them to focus on collections.

Assembly of the packs requires customer accounting and document retrieval skills, which are less costly than collection skills. In addition, when the program is finished, the resources can be discontinued. This is often accomplished with a face-to-face meeting. Receivables Asset Management 87 The organization of a reconciliation and recovery program should follow these seven steps: Compile the list of customer accounts for which a reconciliation pack is to be prepared.

Document the contents and format of a reconciliation pack and the high-speed procedures for assembling it. Estimate the time required for retrieval for each type of transaction e. Estimate the time required to assemble a pack for each customer on the list.

Calculate the number of clerical staff required to assemble all the packs in the desired time frame. It is always wise to plan on more staff, especially if temporary workers are used to insulate against their frequent turnover. Assemble and train the reconciliation team, and designate a supervisor who will answer questions and drive results. An internal staff member is a good choice here, as his or her familiarity with the company and its systems will be valuable in guiding the temporary staff.

Assign and schedule the completion of the packs among the reconciliation staff. Track the progress of the program on a weekly basis, noting specifically: The actual completion of packs versus the schedule b.

The actual follow-up of the packs with the customer by the collectors c. The progress in clearing the aged items, differentiating between cash and noncash adjustments, write-offs reasons for clearing Remember, the ultimate objective is to clear the aged items, maximizing cash recovery, but within the time and cost guidelines estab- 88 Accounts Receivable Management Best Practices lished. Some companies are reluctant to write off even small amounts, resulting in prolonging the program and its cost.

The measurement of the program can be tricky. Every day additional items will age over into the to day column. However, unless you disregard these items, program progress will be obscured. These receivables were spread over 25, different customers and were comprised of over , items many of which were clutter. These receivables were comprised of almost 18, open items, many of which were clutter transactions.

They were spread over 1, customers, and many were over two years old. The company implemented a reconciliation and recovery program with a team of six staff. Receivables Asset Management 89 transactions in the program to a fixed, finite set, you can accurately track the progress in clearing these items. This progress can be measured by defining the aged items on the target list as all items over xx days old as of a specific date.

These examples illustrate how effective a reconciliation and recovery program can be. Two important points are: The inclusion of less aged items increases the cash recovery.

As long as you are preparing a reconciliation pack, it requires little incremental effort to include items as little as 90 days past due. However, inclusion of too many items will cause the pack to be too daunting a task for the customer. These programs take months, not weeks.

Increasing resources can accelerate the completion of the packs, but time is needed to organize the effort, recruit and train staff, and so on. Also, the clearing depends a great deal on the timing of the customer response, and it is unreasonable to expect a response to a pack in less than two weeks. High-Impact Action Program A proven technique for maximizing cash collections in the short term is called a high-impact action program.

The basic premise of a high-impact action program is to implement only those actions that: The objectives of a high-impact action program are to: Typically, such a program includes these seven elements: Categorize the receivables portfolio into segments based on customer attributes size, domestic vs. Develop and document high-speed procedures for each specialized approach e. Develop and implement a collection infrastructure negotiation empowerment, escalation protocol, ad hoc dispute process, document retrieval, credit controls, etc.

Train staff in high-speed procedures, provide workspace, tools, and so on. In an attempt to recover the shortfall in cash flow and increase cash collections in the short term, the company implemented a High-Impact Action Program. It supplemented its collection staff members and dedicated them to the High-Impact Action Program, suspending activity on all other initiatives.

It developed and implemented an ad hoc dispute resolution process, secured senior management download-in, and launched the program. Case Two An equipment vendor needed cash for an impending debt repayment. It decided to raise the cash from its receivables asset, instead of seeking alternate borrowing. This would enable the permanent collectors to devote more time and effort to their remaining accounts, with the net result of all accounts receiving substantially more intense attention.

The results were striking. This is the exact reason why a Reconciliation and Recovery Program is needed for such receivables. Case Three A fast-growing manufacturer of therapy devices was experiencing disappointing cash collections.

The rate of increase in collections was well below the growth rate of revenue. To correct this problem in the short term, the company launched a High-Impact Action Program. It supplemented the collectors with temporary administrative help and ensured that customer service incoming calls were routed to the customer service department.

This allowed the collectors to focus on collection activity. It reallocated customer accounts more evenly to ensure better portfolio penetration, conducted refresher collection training, and measured progress toward targets on a daily basis.

Cash collection records for a day, week, and month were set. Implement the collection activity plan to monitor and measure progress. This tool is explained later in the book, but it measures activities inputs as well as results outputs. Secure management approval, announce to the organization, then launch the program.

Manage the program with experienced, tactical, hands-on supervision, and drive results. Key Points The five key points to remember about high-impact action programs are: Focus resource and management attention.

Divert or suspend other tasks. Secure senior management support. Raise activity levels. Supplemental resources are very helpful. Measure both activities and results vs. Deductions are also called short payments. Customers take deductions when they do not agree with the amount of the invoice or if they believe they are owed money by the vendor. Instead of waiting for the vendor to issue a credit memo, which would be applied to their next remittance, companies take the deduction because it puts money in their pocket now rather than waiting weeks for the credit memo.

Some customers may withhold payment of the entire invoice until it is Receivables Asset Management 93 resolved to their satisfaction via a corrected invoice or credit memo , but most will deduct. Examples of disagreements with the invoice are: Deductions are taken unilaterally by customers, based on their perception of whether the invoice was correct, the shipment proper, and so on.

For many companies, the volume of deductions taken by their customers can number in the thousands every month. Unless such companies have an efficient process for handling deductions, they will be overwhelmed by the volume. There are two major perils of not processing deductions well or on a timely basis: Revenue and profit margins will decrease because of invalid deductions taken by customers.

Revenue and receivables will be overstated in financial reports. This is critically important with the passage of the SarbanesOxley Act of The three dilemmas in managing deductions are: The volumes can be huge, and the damage can be serious if they are not managed well.

The cost of processing and managing deductions can be substantial. The yield or payback can be small. If you do nothing, however, some customers will become more aggressive in taking deductions, and margins will suffer. Best Practices Deduction processing is a science in and of itself, and a book could be devoted entirely to this subject. Many types of deductions, their cause, and resolution, are industry specific. We cannot address industry-specific issues, but will deal with a broader perspective of Best Practices.

The optimal deduction process must be tailored to an individual company, its products or services, its profit margins, and its market power and that of its customers. The best way to handle deductions is to reduce the number incurred. Staff members were overwhelmed with the thousands of deductions incurred each month and fell way behind in clearing deductions. There were a number of negative impacts: Case Two In another case, a distributor had no formal process for deductions.

It did have a policy that all open items over days past due were to be written off. As a result, deductions would be untouched for days, at which point they were written off. The company was losing an unknown amount of profit from invalid customer deductions. This is the most common situation.

However, two actions can be taken unilaterally to reduce the number of deductions taken by your customers. These are: Ensuring orders are fulfilled, packaged, documented packing slip, etc.

This will preempt special handling deductions. Ensuring invoice accuracy, reflecting the accurate net or discounted price agreed with the customer.

However, there usually are some invoicing errors that, if prevented, can reduce deductions. There are also two actions that can be negotiated with customers to reduce deductions: An allowance for damage, shortages, and so on can be negotiated to cover expected losses for this type of event.

Typically, the allowance is expressed as a percentage of the price and is based on historical experience. The allowance percent can be granted on every invoice or taken on a quarterly basis. In return, the customer agrees to refrain from taking deductions for the specified reasons.

This can have a huge impact on decreasing the volume of incoming deductions. Agreement to settle some obligations owed the customer with a payables wire transfer or check. Examples of such obligations are lump-sum promotional support for advertising, shelf space, slotting, and so on. The best expenses for this type of arrangement are low-frequency charges. Finally, abuse of deductions by a customer i. Receivables clerks cannot change the behavior of large customers.

Efforts to reduce incoming deductions generally produce a significant payback and are the best way to deal with deductions. However, 12 common Receivables Asset Management 97 techniques are essential to efficient, effective deduction processing. Small-balance automatic write-off in cash application. Best Practice is for the small-balance deductions to be cleared by the system tool, clearing the open item and charging the appropriate ledger account.

An enormous amount of work can be saved while sacrificing an opportunity to reclaim a very small amount of money. The way to establish the threshold is to compare the cost of researching a deduction against the expected return of the effort. Small-balance thresholds can vary based on the type of deduction. We elaborate on this below. Repeat offenders can be discovered with the retrospective audit.

Alternatively, you may be invoicing a customer the wrong price on a high-volume item shipped in the same quantity numerous times, and that customer may be continually deducting the same amount. Clear communication of instructions to customers as to where to send information on deductions i. Some customers post information on the Web e. Classification of deductions by type at point of entry cash ap- plication. This has three benefits: It enables processing and the small-balance automatic writeoff to be varied by the type of deduction based on probability of collection.

It enables routing of deductions to the person or department within the company best positioned to resolve them quickly and properly.Its rationale was that it sold to a blue-chip customer base and that if receivables became seriously past due, it would suspend service until the receivables were paid.

By automatically integrating the debt collections in the process, the percentage of non-paying existing customers also falls. Track the number of orders that are held for a period of time. Typically they are large Fortune —size companies, with multiple locations or ship-to addresses , and a contract governing the trading. This enables identification of high-deduction customers.

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