IDEA: Try these simple tips to help collect pastdue invoices and avoid bad debt writeoffs.

Try these simple tips regularly to collect customer invoices and avoid bad debt write-offs.  Collecting monies due to your company is not difficult if you are dilligent in your approach.  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 open credit accounts. (summary is just a total by customer, easy to scan)
• Identify all of the past due account customer names (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 those pastdue accounts an AR Aging attached to an email (or a fax if you prefer) and handwrite their own name on it.  This helps to make people feel personally responsible 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.  Make sure to identify this person for all new customers to find out where the invoice goes, who pays it and who to send AR agings for a response. Instruct sales to notify accounting when a new customer is going to be added.
• 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.