AUTHOR: DIANNA LARKIN - CPA, CA
Not every business owner has the luxury of owning a business where customers/clients pay at the same time that the service/product is delivered.
While this may be the case for restaurants, retail stores, auto repair shops and so forth, the majority of businesses have to wait for payment. Managing credit risk and collections is a critical aspect of running their business successfully. A key thing to remember is that a sale is not a sale until you have the money in the bank. When customers do not pay on a timely basis, it can cause serious cash flow issues. This article outlines key considerations for managing credit risk and accounts receivable collections.