A small business owner should concentrate collection efforts on the top 20 percent of the company's customers since they typically account for 80 percent of all accounts receivable.

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This is known as the Pareto principle or the 80/20 rule, where a majority of a company's revenue comes from a smaller percentage of its customers. Focusing collection efforts on these top customers can improve cash flow and reduce outstanding accounts receivable.

A Small Business Owner Should Concentrate Collection Efforts on the Top