In the world of healthcare supply, credit is not just a financial tool—it’s often a lifeline. Suppliers provide critical medical products to a wide range of customers: public hospitals, private clinics, retail pharmacies, wholesalers, and distributors. Many of these buyers depend on credit terms to manage their cash flow, especially in systems where reimbursements are… Continue reading Credit Limits in the Healthcare Supply Chain: Protecting Cash Flow Without Disrupting Care
Tag: Credit Policy
What Is a Bad Debt Reserve and Why It’s Important for Businesses
In the world of business, not every sale turns into cash. As much as we’d like to believe that every customer will pay on time, or at all, reality often proves otherwise. This is where the concept of the bad debt reserve comes into play. It’s a critical accounting practice that many companies use, but… Continue reading What Is a Bad Debt Reserve and Why It’s Important for Businesses
Understanding Average Days Delinquent (ADD): A Key to Healthier Receivables
Every business that sends out invoices wants to get paid on time. But in reality, customers don’t always stick to the due dates. Some pay late by a few days, others by weeks, and in some cases, even months. To keep track of how far past the due date your payments are arriving, there’s a… Continue reading Understanding Average Days Delinquent (ADD): A Key to Healthier Receivables
Optimizing Cash Flow: The Impact of Setting the Right Payment Terms on DSO
Cash flow is the heartbeat of any business. Without enough cash coming in at the right time, even a profitable company can run into trouble. That’s why managing how quickly customers pay—also known as Days Sales Outstanding, or DSO—is so important. DSO tells you how many days, on average, it takes to collect payment after… Continue reading Optimizing Cash Flow: The Impact of Setting the Right Payment Terms on DSO
Factors Influencing Longer DSO
Several factors can contribute to longer Days Sales Outstanding (DSO), indicating delayed payment collection for a business. Here are the key factors: 1. Extended Payment Terms: Offering customers longer payment terms can naturally lead to a prolonged collection period. While this may be a strategic decision, it also increases the DSO. 2. Inefficient Invoicing: Delays… Continue reading Factors Influencing Longer DSO
