06.07.2017 | Posted by Jasmine
A Customer Invoice Is Approaching 30 Days Past Due and You Haven’t Received a Response. What Now?
An effective collections team is vital to the success of any organization, large or small.
Late payments can disrupt cash flow and harm your company. Making sure your company has some kind of formal system that ensures past due accounts get paid is a key component.
To keep your receivables running efficiently, many businesses use a series of phone calls and/or emails to remind customers to pay.
These communications should start out professional and friendly. The attempts to reach your customer should gradually become more serious and persistent invoices go further past due.
How do you know when it’s time to cease all attempts at reaching the customer for payment and turn the matter over to a collection agency?
Here are some helpful steps you can take before escalating the matter to a collection agency:
- Have you tried to reach the customer via phone, email, cell, snail mail?
- Have you attempted to contact someone else in the company, department or a supervisor? Try contacting the operator if possible, explain the situation and that you aren’t getting a call back and see if they can put you in touch with someone else.
- Have you tried calling at a different time of day than you normally do? Perhaps you will have more luck at the end of the day versus the beginning.
- Have you sent an email with a read receipt and marked as urgent? Try also labeling the subject line “Urgent Account Matter” to help draw attention to your request.
- Have you reached out to the customer’s sales rep to see if they can contact the buyer or AP? Often sales reps have relationships with the customer and/or buyers and they can provide a more personal call. Or perhaps you can check the credit application (if available) for an alternate contact number, email, or the owner/officer’s name?
- Have you provided a verbal (via voicemail) and/or written warning (via email) letting the customer know that you have attempted to reach them X number of times and if no response by said date you will be escalating the matter?
- If you have access to a final demand letter, have you sent one? A final demand states that attempts to reach the customer have been ignored and the next step is to escalate the matter to a collection agency. State the full balance, date you need a response by and state the action that will take place if you don’t hear from the customer by that date. Please also remember to provide the best contact information for your company.
- If still no success after sending the final demand and awaiting the allotted amount of time, at this point, we suggest escalating to the collection agency.
Tips to remember: 
- Threatening calls do not help! Be professional and courteous always-you catch more bees with honey!
- Be ready to work with the customer if they do respond. Unless the customer was out of the office or unavailable for good reason, they likely will need assistance in the form of a payment plan. Be open to work with customers on payment plans, but make sure you are diligent in making them stick to the plan they agree to.
- If you have open orders that are ready to ship, make sure to use them as leverage for getting a payment. Always put past due customers that are giving you difficulty on credit hold, many times they will pay to get more goods. Make a decision at that time if future orders should be paid in advance, but don’t let your customer know of your decision until payment for all past dues is in hand!
- Keep detailed notes of when you called, what was discussed and any other pertinent info! If you are unorganized with your follow ups, slow paying customers will use that against you to delay payment further.
- Follow up and consistency is key so set a reminder to follow up with the customer very closely-especially if you aren’t getting a response. The more time that passes the harder invoices will be to collect.