Collection of accounts receivable - Personal Statement Example

Collection of Accounts Receivable Accounts receivable if not well handled can lead to loose of so much money when written off as uncollectable. To avoid this, the company has to come up with a way to ensure that debts are paid in the right time. The best approach that Horowitz Construction Supplies Co.’s could use is setting a time limit for the payment. For example, the company can work with Net 30, where payments are supposed to be done within 30 days from the day of invoice. This method comes with a payment discount offered to debtors that pay earlier than the final date of the payment period.

The discount is aimed at encouraging the debtors to honor their debts faster. To avoid writing off a debt as uncollectable, the company should engage collection agencies. The agencies, who act as a third party should negotiate payment arrangements with the debtors and advice on legal actions to be taken in case the payment is not honored. The above-discussed method should be in a contact that should be agreed between Horowitz Construction Supplies Co.’s and the debtor before any supply is made.

This will make the customer conscious of the underlined terms and avoid anything that could engage a third party like a collection agency.