Do you have an automatic write-off threshold for small balances left outstanding on your A/R?

89% of late payments prevent growth, and researching manually every short payment is not practical nowadays.

To keep up, you must set a minimum threshold, under which you automatically write off everything.

The two key variables to consider when setting this limit are:
1. The cost to you of researching a short payment
2. The likelihood of receiving payment

As to number 1, if you find that traditionally your customers are right 85% of the time, then you will collect only 15 cents out of every dollar deducted.

So, at what level does your research become profitable?

Do the math. You might find it's higher than you realized!

Two words of caution: don't let anyone in your customer base know that you do this, and periodically research balances lower than your threshold so you can spot abuses.

Want to learn more and stay on top of the credit, collections, and AR world?