The whole category in one page.
MARGINS ARE THIN, SO CALCULATE HOW MUCH REVENUE REPLACES A SINGLE BAD DEBT
At typical distribution margins the figure is startling, and it changes how everyone treats credit.
ACT ON THE FIRST MISSED PAYMENT, NOT THE THIRD
The first is the warning; by the third it is a loss. Never supply more to a customer who owes and is not paying — that is how small debts become unrecoverable ones.
SET CREDIT LIMITS CENTRALLY AND HAVE THE SYSTEM ENFORCE THEM AT ORDER ENTRY
Limits only reported afterwards are not controls, and the person selling should never be the person approving the exception.
PAY COMMISSION ON COLLECTED REVENUE, NOT ON ORDERS TAKEN
It is the single change that aligns selling with getting paid.
STOCK TURNOVER MATTERS MORE THAN MARGIN
Thin margin turning many times earns more than fat margin sitting still. Measure margin multiplied by turnover to see which lines actually earn.
CALCULATE COST PER DELIVERY AND SET A MINIMUM ORDER VALUE, BECAUSE BELOW IT EVERY DROP LOSES MONEY
KNOW YOUR CASH CYCLE — STOCK DAYS PLUS DEBTOR DAYS LESS CREDITOR DAYS — SINCE IT DETERMINES HOW MUCH CASH GROWTH WILL CONSUME
CONFIRM BALANCES WITH A SAMPLE OF CUSTOMERS DIRECTLY, BECAUSE IT IS THE ONLY CHECK THAT CATCHES PAYMENT COLLECTED AND NEVER REMITTED
AND VERIFY THAT EVERY NEW CUSTOMER ACTUALLY EXISTS AT THE STATED ADDRESS, SINCE FICTITIOUS ACCOUNTS ARE CREATED TO DIVERT STOCK
