While attending a trade show, Mike discovered a software program specifically designed to manage credit for small retail stores. The program performed discriminate analysis to determine a customer’s credit worthiness. It also monitored accounts receivables, generated customer billing, and produced overdue notices. Mark believed that this system would not change the habits of discount takers, but would speed the average collection of non-discount takers by 50 days. He also expected that it would cut bad debt in half. He believed that restricting credit would decrease sales by 5%
and cash sales would increase to 25% of total sales. The cost of the software would be offset by reducing staff time required to do billing.