Final answer:
Two incentives to improve the age of accounts receivable are financial incentives, such as discounts for early payment, and service-based incentives, like priority customer services for those with timely payments.
Step-by-step explanation:
To improve the age of accounts receivable, a business can implement various incentives that encourage customers to pay their invoices more promptly. Two types of incentives that could be effective are financial incentives and service-based incentives.
Financial incentives might include offering a discount on the total amount owed if the payment is made within a certain time frame. For instance, a 2% discount on the invoice amount if paid within 10 days can be quite appealing to customers. This strategy encourages quicker payments, thereby reducing the age of accounts receivable.
The other incentive is service-based, where customers could receive enhanced service or support privileges if they maintain a good payment record. For example, clients who consistently pay on time might be offered priority scheduling, access to exclusive products, or higher levels of customer support. Not only does this reward punctual payers, but it also provides a motivation for others to pay their invoices early to receive the same benefits.