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Collecting monies due your company is not difficult. The problem with most collection employees is that they are not consistent in their approach. Here are a few suggestions for reducing AR write-offs.
Simple tips for collecting past-due accounts receivable (AR) invoices:
- Run a summary AR Aging every week for all credit accounts.
- Identify all of the past due accounts (i.e. over 30, over 60, over 90, etc.).
- Focus contact on the past-due accounts first. If this requires several days, take the time to contact each customer.
- Call and cover all past-due customers at least once per week.
- Send them an AR Aging on the fax or attached to an email and write their own name on it. This helps to make people feel personally responsible hopefully and might provoke them to get you paid.
- Be consistent but always be courteous and professional. Separate the AP person you are dealing with from their company’s liability. It is not their fault you are not paid. Tell them you understand, but will appreciate their help in any way to get past due invoices paid and resolved.
- If you have any email program that allows you to categorize your emails (i.e. Yahoo, Outlook, G-mail), setup folders for all past-due customers. Drag all of your received and sent emails into those folders. This will allow you to pull an email out and resend it ASAP for a follow-up. The folders will help remind you immediately who you have to contact.
- Create a list (if you do not have one) of everyone responsible who pays you. This is all of the AP personnel that you talk to, fax to, email to.
- When you do not have a fax or email address, write on the AR statement and mail it and print in large or noticeable legible letters on the outside “PAST DUE AR INVOICES”. Few people send statements like this, especially with the AP person’s name on the outside of the envelope. Do it. It works well because you stand out.
- Address the past-due envelopes to their attention by name if known. Circle it in a color if you wish.
- When people clear up their past-due accounts, make sure to tell them thanks.
- Make sure to tell customers when they have credits on their account regardless of the credit’s age. It will prompt them to use them and send you money. They will also be impressed you were honest to bring this to their attention.
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