Tag Archives: A/R

Letters of Credit v. Security Deposits

Posted by on November 5, 2013 at 11:29 pm.

By Dana Farmer. Smith Knowles, PC Some creditors find that maintaining security deposits for marginal customers is a convenient method to protect against default. However, security deposits are still considered to be the property of your customer and if the customer files bankruptcy the bankruptcy trustee has the authority to take the security deposit. Therefore, […]

How to Measure Collection Effectiveness

Posted by on September 28, 2011 at 9:28 pm.

Days Sales Outstanding (DSO)

Days Sales Outstanding (DSO) measures the average number of days it takes a company to collect payment of invoices. Tracking DSO helps a company determine their collection effectiveness and may indicate whether current credit policies and procedures require modification. In the current economy and shifting industry conditions, it is particularly important to monitor collection effectiveness and bad debt write-offs.