For distributors and wholesalers, receivables are usually the largest asset on the balance sheet — and the most loosely managed. Plenty of firms still rely on a salesperson’s memory: who owes what, when they promised to pay, whether anyone has chased them.
That works up to perhaps a few dozen customers. Past that, every month a few amounts fall into the gap between two people, and the money stays with the customer.
Four things the system must know
- 1How much each invoice owes and when it is due — not just the customer’s total. A total cannot tell you which part is overdue.
- 2Each customer’s credit limit — the maximum they may owe, with the system blocking or warning when it is exceeded.
- 3Which invoice each receipt settles — money arriving without being matched to an invoice makes ageing meaningless.
- 4The chasing history — who called, when, what the customer promised. This is the part that lives in someone’s head and leaves with them.
The ageing table: simplest and most effective tool
One table splitting debt by days overdue is enough to read the health of your cash flow:
| Ageing bucket | What it means | Action |
|---|---|---|
| Within terms | Normal | Nothing |
| 1–30 days overdue | Slow, usually the customer’s internal process | Automatic reminder by message or email |
| 31–60 days overdue | Needs a phone call | The account manager calls and records the commitment |
| 61–90 days overdue | Clear risk | Stop new deliveries, escalate to management |
| Over 90 days | Some of it may be lost | Written statement of account, plan a recovery route |
The crucial part is that the action column must trigger itself, not depend on anyone remembering. The system sends the reminder on the due date, and at the threshold it blocks new orders and notifies a manager.
Blocking over-limit orders: hard or soft
This is a reliable source of internal argument. Sales wants flexibility so as not to lose orders; accounting wants a hard block so as not to lose money. The usual compromise:
- Over the limit → the order can still be created but sits awaiting approval and does not release stock.
- A manager approves, and every over-limit approval is logged with a reason.
- Month end produces a report of "orders approved over limit" — if that list is long, the problem is the credit policy, not people’s discipline.
Periodic statements of account
Each quarter, send customers a statement: the list of invoices, how much has been paid, what remains, with a request to confirm. It sounds like a formality but does two real things: it surfaces amounts the two sides disagree on early, and it creates evidence if the matter ever becomes legal.
Three indicators to track monthly
- Average days to collect — how long from invoice to money in the bank. A steady rise is the earliest warning sign there is.
- Overdue as a share of total receivables — the overall health of the customer book.
- How concentrated the debt is — if 60% of receivables sit with three customers, that is concentration risk and needs its own policy.
All three come out automatically provided each receipt is matched to its invoice. That is why the "match receipts to invoices" step at the top of this article is not a small accounting detail — it is the foundation of everything after it.
Want to talk specifics?
SealCore surveys at your premises and sends a fixed quote after the first session — including when the conclusion is that you do not need custom software.
