B2B Collections Best Practices: Preventive Diligence

Consider this motivating story from Inc.com:

“Not a day goes by that Bob Fisher doesn’t thank his lucky stars for Nettie Morrison. But [on March 21, 2002] he was particularly grateful that she worked for him.  That was the day that Foresight, Fisher’s 50-employee software company in Dublin, Ohio, received a $1,635 check from Enron. The very Enron that, 109 days earlier, had filed for bankruptcy. Yet the check, which fully covered Enron’s renewal of a one-year licensing contract with Foresight, came to Morrison, the company’s accounts-receivable specialist, as though it were business as usual.

“How did she manage to wrest payment from Enron when so many others couldn’t? Preventive diligence. Enron had been a Foresight customer since 1997. Beginning almost a year ago, when the news of Enron’s accounting irregularities first broke, Morrison spoke to her Houston contacts almost weekly – even though the contract didn’t expire until February 2002. Using her internal connections, she worked her way to the Enron employee with the power to pay up. By starting early, maintaining good relationships, and remaining persistent, Morrison got her payment.

What contributed to the successful collection was the fact that the company (Foresight) had a defined billing standard in place which the accounts receivable manager diligently adhered to. The company’s invoices contained the following phrase: “If paid by September 30, your cost is x; if paid after September 30, your cost is y (invoice amount plus interest).” The accounts receivable team at Foresight discovered that specifying what the amount of interest would be (rather than just listing a percentage) if payment was submitted past a specified date made a huge difference in how quickly customers paid their invoices.

There are three things you should take away from this:

1. It isn’t impossible to collect from a late-paying or even a bankrupt customer;

2. Diligence guided by professional and courteous communication is key to obtaining payment that is past due, and

3. A smart and sharp accounts receivable process facilitates successful collections.



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 www.jayaramlaw.com.