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Accounts receivable is one of the important areas, which require day to day monitoring. Clear policy, review and the outsourcing wherever necessary are the three components of this account.

Policy: Well laid out policy of sales has to be evolved. If there is a provision for Sale by Credit, then the Credit policy has to be spelt out clearly. Before allowing Credit, the purchaser should be properly evaluated. His credit worthiness over the period has to be ascertained from all available sources. The Credit terms have to be informed to the customer in no unclear manner. If discounts are offered to encourage early payment, that has to be highlighted. Similarly, even in cash sales if there is provision for discounts, even that also has to be appropriately highlighted. These policies should be properly informed to the sales executives at the sales counter.

 Management: As said earlier, management of Debt Collection is another important area. Particularly in the case of Credit Sales, invoices have to be prepared immediately after the goods are dispatched. Some firms send the invoice along with the consignment as otherwise the credit period extends by the number of days delay is caused in preparation of invoice.

The balances in the accounts receivable have to be properly carried forwards. Monthly accounts statements have to be sent to the customers regularly. If there are over dues, such customers should be reminded repeatedly depending on the amount and the period of overdue. In case it is necessary, the over dues must be negotiated properly and the amount to be recovered via Debt Collection.