1 QUESTION FOR YOU
What is the size of your sales ledger – are you collecting your debts effectively?
2 QUOTES FROM OTHERS
- James Lendall Basford (American Aphorist) – “The man who never has money enough to pay his debts has too much of something else.”
- Proverb – “In God we trust, all others must pay cash.”
3 IDEAS FROM ME
- Experience has shown us that by and large businesses are not effective in turning their credit sales into cash in a timely manner.
- On Metrics: Days Sales Outstanding (DSO), is a measure of how many days it takes to turn credit sales into cash. The lower the DSO is; the better. DSO has a direct impact on the level of working capital available.
- On Reporting: Ageing of the sales ledger is imperative to understanding the performance of the debtor book and knowing the level of working capital available to fund the operations of the business.