Mendel Corporation is a recently formed business selling the World's Best Umbrellas. The corporation is selling umbrellas faster than Mendel can make them. It has been selling the product on a credit basis, telling customers to pay when they can. Oddly, even though sales are tremendous, the company is having trouble paying its bills.

Required: Write a memo to the president of Mendel Corporation discussing the following questions.

1. What steps should be taken to improve the company's ability to pay its bills?

2. What accounting steps should be taken to measure its success in improving collections and in recording its collection success?

3. If the corporation is still unable to pay its bills, what additional steps can be taken with its receivables to ease its liquidity problems?