Last week, a question was asked about how to cut DSO in half.
You never said or even suggested that this was virtually impossible.
Would you agree that it is highly unlikely that any credit department
can cut DSO in half?
Answer: Your point is
well taken, and we would agree that it is unlikely that management would
be willing to allow the credit and collection department to take the
necessary steps to cut DSO in half. Is it possible to do so? Sure. However,
in order to do so, a company would probably have to shorten or eliminate
open account terms, and reduce or withdraw open account terms to all
but the most creditworthy customers. Consequently, customers would be
likely to go elsewhere unless the creditor company in question had a
product with no competitors and no viable substitutes. |