The Account Collections Procedure provides the methods for processing late or delinquent accounts.
The Account Collections Procedure ensures an optimum accounts receivable turnover ratio through timely and effective handling of late payment activity. This payment collection procedure applies to the credit department involved with collection of past due accounts receivable and sales or shipping departments. (8 pages, 981 words)
No matter how careful customers are screened prior to credit approval, slow pay or delinquent accounts will occur from time to time. Once an account becomes past due by even a few days, the collection process should commence immediately. Studies have shown that the sooner the collection process starts then the more likely that the debt will be collected.
Telephone communication will often speed up the collection process. Credit representatives, when speaking with a delinquent account, should observe a few tips or principles. Make sure to never argue, accuse or be condescending – Verbally fighting or talking down to the customer will only serve to produce negative feelings and may hamper the collection effort. The ultimate purpose is to secure payment, and this is best accomplished without becoming defensive or irritated.
Account Collections Responsibilities:
The Credit Manager reviews all records for a customer to determine a possible explanation for non-payment prior to commencing the collection process. Upon review, they should then proceed with the collection process by completing an REV109 Ex1 ACCOUNT COLLECTION CONTROL Form. This form will assist in planning and tracking the collection effort. Depending on the amount and the customer situation, the representative can choose to follow-up with collection letters, telephone calls or both.
- Payment Collection Process
- Seriously Delinquent or Unresponsive Accounts
- Working with Collection Agencies
- Writing off Uncollected Debt
Account Collections Procedure References
- Fair Debt Collection Practices Act (FDCP)
Account Collections Procedure Forms