Part 4 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: HANDLING DIFFICULT COLLECTIONS

• Balance the firm's collection attitude with genuine concern for the client and customer service.
• Personalize your concern for the client while collecting forcefully.
• Use increasingly harder demands for collections.
• Use dunning letters and telephone follow-ups.
• Keep notes on all collection contacts.
• Report problem clients' payment status to management and sales management.
• Convert to notes payable.
• Hire a collection manager or agency to boost cash flow.
• Watch for changes in the collection trends and notify management.
• Study write-offs, returns, and allowances to identify problems, then solve them.