WASHINGTON, D.C. – When Congress passed the USA Patriot Act two years ago, it acted swiftly and broadly. The 342-page bill, which President George W. Bush signed into law on Oct. 26, 2001, modified 15 statutes, authorized hundreds of millions of dollars in new spending, and expanded the government’s powers in the realms of surveillance, criminal justice, immigration, intelligence and trade sanctions, among other areas.

The process couldn’t have been more different when it came to beefing up security for businesses shipping goods into and out of the country. Rather than going for heavy-handed legislation or rule-making, the government approached companies involved in shipping and brainstormed with them to develop a largely voluntary, self-regulating system of securing the supply chain.

The shipping community continues to debate the success of the foremost result of this brainstorming, a program known as the Customs-Trade Partnership Against Terrorism, or C-TPAT, run by U.S. Bureau of Customs and Border Protection.

Here’s how C-TPAT works: Businesses–carriers, customs brokers, freight forwarders, importers and anyone else involved with shipping or logistics–sign a memorandum to get the C-TPAT process started. The next step is to conduct a self-assessment of supply chain security using C-TPAT guidelines on physical security, manifest procedures, education and training, and other topics. C-TPAT participants then submit a security questionnaire and profile to customs, develop a program and agree to future audits of security practices to check whether progress is taking place.

For the companies involved, the carrot part of the equation is a reduced number of inspections at borders, access to a list of other C-TPAT members, and an “assigned account manager” at the Customs bureau.

In terms of numbers, C-TPAT certainly seems to have been a hit. As of today, from a core group of “charter members” such as Motorola, Ford Motor, and Target , C-TPAT has 4,300 companies signed up. “[That number] indicates that because of C-TPAT,” Customs Commissioner Robert C. Bonner testified in Congress recently, “trade is a lot safer from terrorist exploitation.”

Full story at Forbes.com

As you sift through the financials of investment prospects, keep an eye on accounts receivable. This item, found just below “cash and equivalents” on the balance sheet, indicates the money owed a company by its customers.

Looked at in the context of sales performance, accounts receivable can suggest how quickly customers are paying their bills. Naturally, the sooner they cough up, the better. The company can then plough that cash back into the business, pay its expenses, reward stockholders with dividend payments, eliminate debt, or do any of the other good things that cash flow enables. Also, it’s a sad truth of business that the older a receivable is, the less likely it will be paid off at all.

A good way to see whether a company is staying on top of its accounts receivable is to measure “accounts receivable turnover,” defined as total credit sales for a particular accounting period divided by the average value of the accounts receivable during that period.

Full story at Forbes.com