1. Why is it so important for small companies to monitor their accounts receivable? What are the implications for companies that fail to do so?
2. Why are some entrepreneurs hesitant to take bold actions to collect the money that customers owe them?

When Randy Ringer developed the cash flow forecasts for the business plan he created for Verse Group, a New York City–based marketing and branding company, he assumed that the company’s clients would pay their invoices in 30 days. As Ringer and his business partner learned more about the industry, however, they discovered that companies in their industry typically did not see any cash flow until 60 or more days after completing a job and billing the client. They quickly revised their business plan and increased the minimum cash balance they would keep on hand from 3 months’ worth of expenses to 6 months’ worth. They also established a policy that requires clients to prepay a portion of any project that requires Verse Group to pay substantial up-front costs. Their industry’s collection patterns “have changed the way we do business,” says Ringer.