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Review your pastdue invoices frequently.  There are numerous reasons why customers invoices are late and most are not due to them going out of business.  Call but ask courteously why their payment is late.   Your business is to make money but of course, that big net profit number is irrelevant if you cannot collect your billings. Find out why.

Follow these steps to get started collecting and make collection efforts everyday.

1. Run your AR Agings that show pastdue invoices frequently. Do not wait until the end of the month. At a minimum, review them weekly or more.
2. Are the pastdue culprits new customers? If so, you may have the wrong billing address or email address.  Ensure they have been sent to the correct address.  Did you call the company to make sure you knew where to send invoices before sending the first one to them? That should be part of the new customer setup procedures when you enter them up into your customer files.
3. Send your company AR statement (email or fax) to their AP deparment which clearly shows their pastdue invoice amount (circled or highlighted) and ask for their response concerning payment status.
4. When they do not respond, call their AP department and ask if they have the invoice, if they agree with it, are they missing backup, authorizations and if not, why is it not yet paid.  When you set up the customer originally, that is the time to find out the name and number of the AP person who will be paying you.
5. Is the non-payment your company’s fault? Wrong address?  Wrong price? Wrong quantity?  Quantity different than their purchase order? Delivered to the wrong location? No receiving signature on the bill of lading or your shipping documents? Their AP person will have no problems telling you what you did wrong.
6. Do you have a written purchase order, or do you have a written email and authorization (yes or approved) between your sales person and the customer’s buyer agreeing on product, quantity, price, time of delivery?  Either one in writing will help you collect because verbals will cause long delays.
7. Is the customer mad at you?  Bad product? Wrong product? Failed product in the field your team does not know about?  Once you know this is the problem, notify your assigned sales person to call the customer and resolve the issue since he may be forced to adjust the price or give them a credit.  You may no longer have a pastdue but a credit to issue.
8. Who in your sales department has called on them lately to resolve issues?
9. Has their AP person been told NOT to pay your invoice and by who?
10. Make it easy for the customer to contact you by listing your information on your company invoice (telephone number, email address, fax number, full address, contact name for AR Collections).
11. When making the first call, be humble because they may not have the invoice, or your company’s bad or late shipment may have caused them problems you do not know about, or the invoice may be billed incorrectly, etc.
12. Always be respectful, non-argumentative, non-judgemental, easy to contact, easy to reach and speak to in order to collect your firm’s outstanding receivables.

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