Now that we have some context for the situation it's appropriate to begin to investigate, though possibly not where you might think. And the investigation is actually a bit hindered because management fired the accounts receivables department. What I'm really interested in is trends as to how things have evolved over time. There is a also a video
for this insight which is a component of the Effective Problem Solving Course
As the Accounts Receivable group has not been able to reduce the [Gap] between the [Desired Avg AR Period] and the [Current Avg AR Period] maybe it might be appropriate to do a bit more investigation.
A [Sale] to the [Customer] results in an [Order]. The [Order] results in a [Shipment] to the [Customer] followed by an [Invoice]. The [Invoice] adds to [Accounts Receivable] and when the [Customer] sends a [Payment] it reduces [Accounts Receivable].
It seems there are four trends that it makes sense to look at, [Avg Sales], [Avg Order Size], [Avg Order Period] and [Avg AR Period].
The trend lines indicate that the [Avg Sales] are declining though [Avg Order Size] is remaining relatively steady. Though the [Avg Order Period] and [Avg AR Period] are both increasing.
If you look at the [Percent Change] tab notice how much easier it is to tell how things are trending once you normalize them? With multiple trends lines all on different scales it's often difficult to get a real sense of what's happening.
So if this is how things are trending it's probably appropriate to try to figure out why.