Question
The newly hired (one year ago) Accounts Receivable Manager believes that he is deserving of a bonus, as he has increased the Accounts Receivable turnover
The newly hired (one year ago) Accounts Receivable Manager believes that he is deserving of a bonus, as he has increased the Accounts Receivable turnover to 24 times per year. The Sales Manager has just heard about this and is furious and has told the President that he thinks that the A/R Manager should be fired not get a bonus! He feels that he is driving away his customers as sales are down 40% since last year. The Accounts Receivable Manager believes that the Sales Manager should take responsibility for the decrease in sales! The Industry average for collection is 6 times per year and in the past this company has had a turnover of between 5 and 7 times. The President, has never taken a finance class, and has asked you for advice as he doesn't understand why the Sales Manager would be so upset!
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