Accounts Payable & Receivable › Collections & Bad Debts
How do you prioritize collections to maximize cash recovery?
IntermediateAnswer
Prioritize by expected value: balance size, days overdue, risk of default, and probability of payment. Focus personal effort on large, at-risk, or disputed accounts; automate reminders for small/low-risk ones. Resolve disputes fast (they block otherwise-payable cash), and set clear next actions and promise-to-pay follow-ups.
Real-world example Collectors work a ranked list where a large 75-day balance at a distressed customer outranks many small current items.