Use this document to provide an overview of your collections procedures.
Step 1: From Accounts Receivable, generate an A/R Aging Report, showing invoices that have been unpaid for [30, 40, or 60 days].
Step 2: Draft payment reminder letters for customers with invoices that are more than [40 days old]. Send these to the salesperson on that customer's account, as well as the [Accounting Manager] for review.
Step 3: Once approved, email these letters. Enter in the A/R Aging Report the dates when these letters were sent.
Step 4: If a customer emails back or calls to say that a payment was being processed, verify which invoices are being paid. Ask also about any overdue invoices that are not covered by the incoming payment.
Step 5: Confer with the [Credit Department] if there is any need to update a customer's credit status. If yes, be sure to verify the new credit terms and inform the customer about the adjustment.
Step 6: Choose a combination of collection tactics, which are presented here in increasing order of severity:
Add a reminder notice to late invoices.
Issue dunning letters by email.
Have a senior manager call a counterpart at the customer's organization.
Set up a periodic payment schedule.
If an invoice remains unpaid after [xx days], consult the [Accounting Manager] on whether to refer the matter to a collection agency or take other appropriate steps.
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