Accounts Receivable: Best Practices Fundamentals Part 1

When you do a Google search for “accounts receivable management” or “accounts receivable best practices” you’ll find numerous results from various sources giving their list of key techniques and strategies for how to best handle accounts receivable. In the first three articles of this four-part series of Best Practices Fundamentals we will examine three outside sources and their accounts receivable advice. In the fourth and final article we will identify the core fundamentals that each of them have in common.

“10 Accounts Receivable Collection Techniques”

Here are 10 accounts receivable collection techniques offered on the website of Accounting Financial Taxation:

Technique 1:  Approve Credit Levels In Advance — Before the sales staff makes a sales call, they should first contact the credit department to see what level of credit will be granted.

Technique 2: Show Respect — It is critical to treat customers with the proper degree of respect.

Technique 3: Increase The Level Of Contact — The level and intensity of contact should gradually increase as the delinquency period extends.

Technique 4: Involve The Sales Staff – The salesperson who initiated the sale and business relationship should have a role in the collections effort, taking advantage of the initial rapport created with the client.

Technique 5: Contact In Advance For Large Amounts — If you have extended a large amount of credit to a customer for a specific order, it makes sense to contact the customer prior to the due date of the invoice.

Technique 6: Document All Contacts — If there is no record of whom a collections person talked to, or when the discussion took place, then it is very difficult to follow up.

Technique 7: Agree To and Enforce a Payment Plan If Necessary — If a customer simply has no cash available with which to pay off an account receivable, it is reasonable to accept a payment plan.

Technique 8: Obtain Return Of Goods If Cannot Pay — There will times whgen the customer has no ability to pay. When this happens, try to persuade the customer to return the products sold.

Technique 9: Alter Credit Terms for Problem Customers — If it is apparent that a customer is having ongoing trouble in paying for invoices, then its credit terms must be restricted.

Technique 10: Block Shipments to Problem Customers – Your collections team should have the ability to block shipments to a problem customer until payments have been received on existing invoices.

The Jayaram Law routinely and successfully assists its clients in their business-to-business (b2b) collection needs.  We take pride in obtaining payment on accounts receivables without fracturing critical business relationships or engaging in time-consuming and costly litigation efforts.
If you need business debt collection services conducted in a professional manner, contact our B2B (business-to-business) debt collection law firm by calling 312.454.2859 or visiting