How can management practices speed the collection of recievables?

Question

Which management practices tend to slow the collection of recievables? How can recent changes in the banking industry influenced the collection process?

Answer 1

with interest rates being so low - there is less of an advantage to a company to stretch payments - if your average deposit was $4million at 4% - you were getting $160K in interest a year - with the rate down now you may only be getting 2% - or $80K/year - so in cases where vendors offer a 1% net 10 discount - it pays to pay earlier -

so a management practice that can speed collection is to offer discounts -

another is to "stay on top of your receivables" - some businesses feel it so important that they have a person dedicated to that task - if terms are net 30 - at 30 days are on the phone.........