How do I find out how a food wholesaler’s accounts pay their invoices?

Start with the aged receivables report as of a recent date and as of the same date a year earlier. Compare them. If the older balances have grown while sales stayed flat, customers are paying more slowly or the seller is chasing less.

Then trace several paid invoices to the bank statements. You want to see that the deposit date matches what the books say. Ask how credits, returns and short deliveries are handled, because disputes often explain why a restaurant or grocer holds back a payment.

Look at concentration. If a handful of customers make up most of what is owed, find out how long each has bought from the wholesaler and whether they have a written supply arrangement. Ask whether any customer has changed ownership recently. Ask what has been written off and when. A seller who can name the bad debts and explain them is easier to trust than one who says there are none. Finally, ask how the business would collect from customers after the sale, since some buyers find that good payers were paying because of a personal relationship with the owner. Keep notes on every customer who pays late, because the pattern matters more than any single invoice.

Key takeaways

• Compare today’s aged receivables with the same report from a year ago.
• Trace sample invoices to bank deposits instead of trusting the ledger alone.
• Check how many customers account for most of the unpaid balance.