Susan's dad died and left her with many outstanding receivables for an auto parts business. She needs to collect them in order to keep the business running. What can she do?
QUESTION: Susan and her mom inherited an auto parts business when her dad died in February. He had a lot of accounts receivable, and they need to collect in order to keep the business going. What can they do?
ANSWER: Make a list of those accounts and go visit them personally. You don’t need to be unkind, but you need to use the story of where you are as leverage with these people. Most of these accounts receivable are local people that you could sit down, look in their eyes in person, and collect these accounts. You do not hire an outside person. You work the phones, you work the shoe leather, and you don’t need to be mean or intimidating. You just go in there and tell them your story and ask for their help. I need you to clear this. When can you clear this? Can you give me some of it today? Then, quit running so many accounts receivable going forward. Put this thing on a cash basis or close it.