GPI 453 – Beef up your past due statements; make your accounts receivable past-due notices pay off.

The collection function of any company makes calls, copies invoices and sends statements all hopefully to provoke payments.  These statements detail all of the invoices sent to the customer that have not yet been paid.  They are emailed, mailed, faxed and hand delivered to all customers who have past due invoices currently beyond the initially extended payment terms.  If they are sent out they should function well for their purpose.  Here are some suggestions you might try to make your statements more effective.

Make accounts receivable statements more effective:

• Person name: Address each statement specifically to the accounts payable person by full name when known.
• Easy to locate contact numbers/emails: Show your collection person’s telephone number, fax number and email address to make it easy for the customers to contact you.
• Easy to find age, number and PO reference of invoices: Show the past-due age, invoice number and corresponding customer’s purchase order number of each invoice listed on the statement.
• Easy to make payments: Include your company’s lockbox number, ACH instruction or company wiring instructions so they can pay you immediately if they choose to.
• Easy to ask for backup: Announce clearly on the face of the statement that the recipient (accounts payable person) can call, email or fax your collection department to request and obtain proofs of deliveries, copies of invoices, freight bills included, local and state sales tax rates charged and of course any copies of the customer’s purchase orders or effective contracts mentioned or associated with the outstanding invoice(s).  Make it easy to request these items immediately to expedite eventual payment.
• Easy to respond: If possible, include a section where the recipient can note a check number and dollar amount already mailed or to be wired on a future date when he or she writes on the statement to respond.  The recipient is more likely to fill this and send it rather than calling on the telephone. If you make it easy for them to respond, they normally will. Most people are not interested in speaking to someone or their company to which they owe money so give them an option to respond another way.
• Standout — include handwriting: Before sending the statements, circle the items now past due by hand with a dark ink circle so there is obvious handwriting on the document.  This will stand out among all of the statements the person receives for the day.  You must be unique and give the impression this is not a computer-generated message but issued by a live collection agent sitting and waiting for payments due her company.