Terms of Agreement

• Contracts that are signed with customers need to be clearly worded, airtight documents. The contract should specify the penalties for non-payment by the agreed upon payment date. Penalties may include interest on the accounts receivable, a penalty fee and attorney fees payable in the event a lawsuit has to be filed. The contract should also cover client and accounts payable contact information, summary of the project and sale details. The signed contract should be sent to the accounts payable contact in the client's office.
  
  

Verbal and Written Reminders

• One way to collect accounts receivable is to first make verbal contact with the client. A friendly reminder may be all that is needed to receive payment. Businesses need to set up a procedure for the collection of accounts receivable, including a template for written communication. The same template can be used with changes made to the amount owed, date and purchase details. When verbal contact fails to bring in the outstanding payment, written contact should follow. Written contact serves as a reminder to pay, and provides documentary evidence of the effort made to collect payment.
  
  

Accounts Receivable Collection Strategies

• Businesses that provide credit payment periods to clients need to have a dedicated person to handle the accounts receivable area of business. There are certain strategies that companies can adopt to collect outstanding payments. These strategies include initiating contact with and getting to know the accounts payable team; calling the company 15 days before the payment due date, to ascertain there will be no delay in receiving payment; providing the client with a fortnightly or monthly accounts receivable report; and getting credit card details from the client to be used as back-up in the event of non-payment.
  
  

Using the Sales Team to Collect Payments

• A business can use its sales team to help in the collection of accounts receivable. Sales members in a company have a vested interest in getting paid when their commission is linked to receiving payment from the client. For example, you might establish a company rule that stipulates payment of sales commission to be made only after client payment is received, rather than making payment upon the closure of a sale. Sales people establish business relationships with their customers. Companies can make use of these relationships by having the sales team members contact clients for payment.