Popular collection techniques a number of collection

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Unformatted text preview: e aging shows that most accounts are collected in about 35 days and a few accounts are way past due, then the firm should analyze and pursue collection of those specific past-due accounts. Popular Collection Techniques A number of collection techniques, ranging from letters to legal action, are employed. As an account becomes more and more overdue, the collection effort becomes more personal and more intense. In Table 14.4 the popular collection techniques are listed, and briefly described, in the order typically followed in the collection process. 620 PART 5 Short-Term Financial Decisions TABLE 14.4 Popular Collection Techniques Techniquea Brief description Letters After a certain number of days, the firm sends a polite letter reminding the customer of the overdue account. If the account is not paid within a certain period after this letter has been sent, a second, more demanding letter is sent. Telephone calls If letters prove unsuccessful, a telephone call may be made to the customer to request immediate payment. If the customer has a reasonable excuse, arrangements may be made to extend the payment period. A call from the s...
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This document was uploaded on 01/19/2014.

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