You would think that most business owners would be on top of their AR, but that is simply not true. I can't recall all of the business turnarounds I have worked where this was the first item we had to tackle. The best way to view the topic is anything over 30 days is a loan and unless you are a bank - this is not a business model.

The area of real concern is the impact of the business cycle on AR. If you are in an Expansion or it's just coming to an end, everyone of your customers should be doing well enough financially to pay on time. If they are not, what are the chances they will be able to pay when the contraction starts or you're in a full blown recession?

Topics: Value Map the process Go electronic - automate billing SOP's for all components of the Accounts Receivable process Establish/Clarify credit and collection policies - i.e. all revenue recognized same day as payment received, monitor credit limits in sales Be Proactive - all invoices reviewed for accuracy, follow-up calls to check on it's accuracy, establish if there are any obstacles to online payment - respectful follow up Fit your AR to their AP