Debtors and Work in Progress Lock Up otherwise known as Lock Up is the amount of days taken to convert your WIP and your Debtors / Receivables into Cash.
It is calculated by combining the two measurements:
Debtors / Receviables (money owed to you)
http://www.mcnamaraandcompany.com.au/blog/the-importance-of-having-good-control-of-your-debtors
To improve Debtors / Receivables you could:
- Have clear terms of trade.
- Make Payments easier.
- Issue statements property on overdue accounts.
- Issue letters / followed by phone call advising the client / customer of the overdue account.
Work In Progress (WIP)
To improve your WIP you could:
- Communicate to the client / customer what is required to complete the task / engagement.
- Issue interim accounts.
- Issue invoices promptly at the end of the engagement.
If you would like to discuss further please contact us:
McNamara and Co - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandcompany.com.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.com
Please refer to disclaimer at the bottom of the page.