Debt Collection Workflow

Collecting money from customers (debtors) is critical to maintaining good cash flow. While Maintenance Essentials has a standardised process, every customer and each debt must be considered on its own merit.

Purpose

To collect outstanding debts by owed by customers and inform internal stakeholders of potential risks.

Who is responsible

Debt collection is ultimately the responsibility of the company accountant. however this person may nominate other people to carry out specific tasks.

Communication

It is important that there is an audit trail of communication for the collection of each debt. The audit trail should include details of each email, fax, letter and telephone call that is made to a customer about the debt.

NetSuite is the standard method for recording all incoming and outgoing communication with each customer.

Debt collection process

30 Days, Debt Collection 00 - Oversight

Email to provide a customer of a missing invoice.

45 Days, Debt Collection 01 - First Reminder

The first collection email is a friendly reminder. Assume that the customer has forgotten to pay and courteously invite him/her to pay promptly. Most people will make a payment after a couple of reminders.

60 Days, Debt Collection 02 - Second Reminder

The second Inquiry Collection Letter should use positive wording, but states firmly that the customer may pay a penalty for continued nonpayment such as a late fee, a collection fee, or interest on the amount owed.

90 Days, Debt Collection 03 - Warning

This is the third collection email for I&T and states firmly that the customer failure to reply may result in the stopping of supply, legal action.

120 Days, Debt Collection 04 - Stop Supply

This is the fourth (final) collection email for I&T and states firmly that the customer failure to reply will result in the stopping of supply, legal action.