When our receivables are facing up to significant delays, then it could be that we willmight need to take drastic actionactions.

While no company intends to adoptintentionally adopts weak accounts receivable policies, lack of planning, poor enforcement or a failure to focus on thetheir function can result in unintended consequences. The following may be a factor:

• FailFailing to follow up with customers promptly when payments are past due
• AllowAllowing sales manager to override credit limits –, and endending up suffering losses from bad credit risks
• Don’t payNot paying sufficient attention to the accuracy of their payments, invoices or credit terms
• AllocateAllocating cash payments incorrectly, making it harder to figure out which payments are outstanding – accounts team

Delayed payments can be a headache, especially when it comes to the timely payment of salaries, incentiveincentives and operational expenses. Not only does this become a financial burden, but it can also behave an emotional repercussion and all of the energy that goes into chasing payments can affect our business output.

In our business, the client does not care about the payment after the end of the specified policy period, and if they delay the payment to the insurer, they will take action against us/client and willus or not pay our commission until the issue is resolved.

Finance Point of View:

If the premium is not settled within a year or agreeda credit terms. Overdue is agreed upon, an overdue days interest will be debited from the respective managermanager's incentive payout amount – Thisthis will be considered once management approvedapproves and it will help to improveimproving the collection.