A Publisher’s Cash Management Plan: Part 2–Managing Your Accounts Receivable

November 2002
by Howard Fisher and Dan Siburg

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Every publisher–in fact, every company in any field–must manage all of its outstanding accounts receivable, which may include promissory notes, employee advances, rights and licensing payments, and even income tax returns. This article focuses on the basics of managing your trade accounts receivables.


Customer Considerations

A diverse group of industry segments and customers will help your company avoid financial problems when an industry segment or a single customer has an economic problem. A broader industry base also reduces your risk from returnability.

Help and support good-paying customers and fire bad-paying customers. A customer that does not pay its bill is not really a customer and the sale to it was not really a sale.

Your A/R reporting should give you the ability to segment accounts by customer type. Learn what each segment means to you in terms of sales concentration, returns, credit worthiness, and “days sales outstanding” (see below). This way you can track the differences between and among stores, libraries, and wholesalers.

Ideally your customer mix will provide money at several points over a range of time via cash sales to consumers or special sales; 30-60 day terms for non-book- trade sales; 85-90 day terms for sales to Ingram, B&T, Borders, and B&N; longer terms for sales to national distributors that must wait to be paid before they pay you; and sales overseas with terms…IBPA Members – Click here to view the full article (login required).

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