To mitigate the risks associated with receivables, businesses can adopt several strategies:
Credit Checks: Conduct thorough credit checks on new customers before extending credit. Credit Insurance: Purchase credit insurance to protect against potential losses from non-payment. Diversification: Diversify the customer base to reduce dependence on a few large clients. Payment Terms: Offer flexible payment terms to encourage timely payments. Discounts for Early Payment: Offer discounts for early payments to incentivize customers to pay sooner.