You notice that your accounts receivable days have doubled in the first six months of this year. Do you give the A/R Director a bonus or put him/her on probation? Why? Explain fully what questions you would ask the Director about the A/R and why it has doubled.

To determine whether to give the A/R Director a bonus or put him/her on probation, it is important to gather more information about the increase in accounts receivable (A/R) days. Here are the questions you should ask the Director to understand the situation:

1. What factors have contributed to the increase in A/R days?
Understanding the reasons behind the increase is crucial. It could be due to various factors such as changes in credit policies, delays in customer payments, issues with billing or collection processes, or an increase in sales volume.

2. Has there been any change in the company's customer base or market conditions?
Changes in customer behavior, economic conditions, or industry trends can impact the payment patterns and overall A/R days. It is important to gather this information to evaluate if the increase is a result of external factors beyond the Director's control.

3. How have the collection efforts been?
Assess the effectiveness of the A/R department's collection efforts. Find out if they have been proactive in following up with customers, managing delinquencies, and resolving payment issues promptly.

4. Are there any issues with the billing or invoicing process?
Mistakes in invoices, delays in sending out bills, or inaccuracies in the billing process can lead to payment delays. Understand if any such issues exist and how they are being addressed.

5. Have there been any changes in the credit policies?
Changes in credit terms and policies can impact A/R days. Evaluate if any modifications were made and how they have affected the payment behavior of customers.

6. What actions or strategies have been implemented to manage A/R?
Assess if the A/R Director has implemented new measures or strategies to improve A/R management. It is important to understand their approach and evaluate the effectiveness of these initiatives.

By asking these questions, you will gain a comprehensive overview of the factors contributing to the increase in A/R days and the A/R Director's performance. Based on the Director's responses and the overall assessment, you can determine whether to give a bonus for effectively managing the situation or put the Director on probation for failing to address the challenges appropriately.