Avoiding a Worst-Case Scenario: Customer Bankruptcy

By Bob Sefton - The ultimate threat to AR—and risk to the company—is the notification of a bankruptcy issued by the courts for one of the customers that owes you money. If this happens, there are several general things the AR manager should understand and do: Stop direct collection contact with the customer and comply with the bankruptcy order. Read the debtor’s bankruptcy papers in order to understand the type of bankruptcy you’re dealing with and to provide an indicator of your rights…