Giving Credit, Where Due --Dickeson

Price, customer changes and count are all we need to know. If we don't know them instantly, then we'd better crank up the computer system. I recall with sadness one printing leader, no longer in the business, saying, "Try as we might, Rog, we can't get our invoices out in less than 14 days."

Collection of receivables is another thing. If I ask a printer what his credit terms are, the most likely answer I'll get is a proud "30 days." Yet when we look at the collection record it shows 45 days. And that's after the invoice has been issued. Somehow, after the sale has been booked, management forgets about collecting the money. That's why, in applying TOC—Theory of Constraints—we look first at the constraints management itself has allowed in administering its policies. What causes that difference between policy and execution? And is it after that quick-pay discount, which has been abused?