International customers usually pay by electronic transfer which is preferred. But, some international customers pay by dollar denominated drafts payable through foreign banks which are express delivered. This increases GMC’s average collection time as well. The …show more content…
One way they can improve is by helping their customers through the process of setting up wire transfers, ACH transfers, and potentially offer incentives to do their payments this way. GMC could also create a fee for mailing payments as a disincentive to do that method of payment. Another way GMC could improve their collections process is by using an electronic lock box system. GMC would use this system to collect wire and ACH payments thus reducing collection float, especially domestic. If more customers used these transferred methods when making payments, GMC’s collection float would be greatly reduced as well as their average collection period. This would also allow GMC to credit their account receivables quicker. GMC’s collections process isn’t the only process they have problems with. Their disbursement process also has some issues that can be worked