Central Manufacturing

Summary

You have advised me that that you are concerned with bad losses. A superficial analysis of your accounts receivable indicated that a large fraction were over 90 days past due. While you sapidity certain that these accounts leave behind be collected eventually, the company has see problems in paying its bills.

Analysis

The bad debt losses are a ensue of the past due accounts receivable and can tho be rectified once the underlying problem with the charm of accounts receivable is resolved.

The difficulty in paying bills is a result of the cash flow shortage which can similarly be resolved by fixing the underlying problem; the crop of battle of accounts receivable.

There are several possibilities as to the cause of the underlying problem, and entirely a thorough investigation of each possibility allow for determine the cause and lead to the best possible solution. It is also imperative to keep in mind your companys key success factors when determining the contributing factors to ensure that nothing is overlooked. The following are possible contributing factors and methods that should be used to investigate them.

1. quotation Policy. If the confidence polity is too lax or if move are not being taken to check the consultation worthiness of potential clients, the company could be extending credit to regretful clients.



This risky lending will obviously create potential collection problems and could lead to an increase in bad debts as a result. A review of the current credit policy and steps taken to evaluate the credit rating of clients will indicate whether improvements are needed in this area.

2. Sales. Incentives based on total billings or number of new accounts could push gross sales staff to sell to clients who may be less than credit worthy. The sales staff also needs to be witting of the production process...

If you want to get a full essay, order it on our website: Ordercustompaper.com



If you want to get a full essay, wisit our page: write my paper