Part 2 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: EXTENDING CREDIT

• Tighten up credit practices.
• Investigate new credit customers adequately.
• Check references before extending credit to a new customer.
• Establish credit limits, then, enforce them.
• Write sales contracts to permit recovery of collection fees.
• Write sales contracts/credit agreements to permit charging interest.
• Consider credit insurance.