What potential issues arise from not following up on overdue accounts?

When an organization fails to follow up on overdue accounts, it can lead to increased potential for bad debts and significant cash flow problems. This occurs because overdue accounts represent money that is owed to the company but is not being collected. When these accounts are not addressed, there is a higher risk that the debts will be written off as uncollectible, leading to losses.

Moreover, cash flow problems can arise because unpaid invoices can hinder a company's ability to meet its own financial obligations, such as paying suppliers or employees. Without adequate cash flow, the business might struggle to maintain operations or invest in growth opportunities. Overall, proactive management of accounts receivable is essential for maintaining financial health, and neglecting overdue accounts can jeopardize that stability.

In contrast, the incorrect answers highlight unrelated effects. For example, increased inventory levels or improved vendor relationships are not direct outcomes of not managing overdue accounts. Similarly, enhanced customer satisfaction would not stem from failing to follow up on debts; in fact, it could lead to dissatisfaction from creditors waiting longer for payment.