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Cash Flow
If cash flow is the engine that drives businesses forward, delinquent accounts are the brakes that bring businesses to a sudden and screeching halt. Most credit managers are aware of the fact that the probability of collecting a delinquent account drops dramatically over time. For example, according to one analysis after six months the probability of collecting drops to 57%, and after a year, the chance of collecting a past due account drops to below 30%. Credit managers need to make certain that their internal collection efforts are adequate to the task.
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