Accounts receiveable collection

1.1. As is the case with most companies that deal with commercial accounts, A Sample Company, Inc. gives payment terms to its customers. The ensuing Accounts Receivables are an asset that must be managed like any other asset to maximize return and minimize loss. This is accomplished through creation of and maintenance of comprehensive, well documented procedures for collecting accounts receivable. 1.2. A comprehensive Accounts Receivable collection procedure is most effective when used in conjunction with a properly devised procedure for granting credit. If proper policies are established and followed governing eligibility for open account status, many accounts receivable problems are prevented from occurring. 1.3. The purpose of the credit granting procedure is to determine whether or not a prospective customer is worthy of credit, and to what degree. As a customer's financial condition changes, his credit status must be reviewed and modified as appropriate to avoid risk to A Sample Company, Inc.. 1.4. The focus of a well-designed collection procedure must be on proactive rather than remedial collection. We want to prevent past due receivables from occurring, so that we don't need to concern ourselves with collecting them.