Describe the methods available to a firm for expediting the collection of cash?

Question

Describe the methods available to a firm for expediting the collection of cash?

Answer 1

Set up a program with a bank to collect funds where the business is transacted and electronically transmitted to the company's local bank.  Process all payments daily, this would include opening the mail, preparing deposits, and making deposits.

Some action can be taken on the sales transactions; you can shorten payment terms or even require cash transactions.  You can encourage your customers to pay promptly by issuing discount payment terms.

Actively monitor and manage receivables.  Institute collection activity immediately after terms have been violated.  Aggressively pursue seriously delinquent accounts and follow up on legal proceedings.