Accounts Receivable & Collections
PURPOSE
Accounts Receivable & Collections establishes a consistent process for invoicing customers, collecting payments, and managing outstanding balances to maintain healthy cash flow and accurate financial records.
By billing promptly, monitoring receivables, and following up professionally on overdue accounts, the business improves cash flow, reduces bad debt, and strengthens financial stability.
Without a structured accounts receivable process, invoices may go unpaid, collections become inconsistent, and cash flow problems can negatively impact business operations.
PROCEDURE
Generate and send accurate invoices promptly after products or services are delivered.
Verify that all invoice details, pricing, and payment terms are correct.
Record all invoices in the company's accounting system.
Monitor outstanding accounts receivable on a regular schedule.
Send payment reminders before and after invoice due dates as needed.
Contact customers professionally regarding overdue balances.
Document all payment communications and collection activities.
Resolve billing questions or disputes promptly and accurately.
Record all payments and reconcile customer accounts.
Review accounts receivable aging reports regularly and escalate delinquent accounts according to company policy.
SUCCESS BEHAVIORS
The most effective teams consistently:
Invoice customers promptly and accurately.
Communicate professionally and respectfully.
Follow up on overdue accounts consistently.
Keep detailed payment records.
Resolve billing questions quickly.
Protect cash flow by staying proactive.
COMMON FLOW RESTRICTIONS
Accounts receivable and collections become ineffective when teams:
Delay sending invoices.
Wait too long to follow up on overdue balances.
Fail to document customer communications.
Ignore small past-due accounts until they become major problems.
Apply payments incorrectly or leave records incomplete.
Avoid difficult collection conversations.