When accounts receivable are overdue, it's often hard to evaluate the root of the problem. Yet with the right information, you can decide when it makes sense to keep hounding a deadbeat customer and when things are critical enough to warrant negotiating a payment workout instead.

Dan Morris, president of turnaround specialists Morris Anderson & Associates, in Chicago, suggests the following lines of inquiry:

What are the customer's current sales, profitability, and margin trends? "Ask the company's chief financial officer or CEO. If he or she won't cooperate, you'll have to try to get these answers from public sources, industry experts, competitors, or suppliers," says Morris.

Action plan: analyze the financial trends closely. If the problem is a predictable seasonal cash-flow crunch, wait for payment. But if sales are headed south, consider cutting a discounted payment deal while there's still time.

Any news developments worth noting? Check newspaper and magazine back listings and public reporting services to find out whether the customer faces any lawsuits, government action, or product recalls, or any other major event that might affect its ability to pay its bills.

Action plan: if the customer's bankruptcy is a possibility, remember that you're better off negotiating your own settlement.

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