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How to Reduce Your Aged Receivable

Use a combination of methods to improve collections. Here is a list of some methods and tips to use:

  • Utilize collection feature of your accounting software. These should include Aged Invoice, Average Pay Days, Collection Notes, Pay off amounts.
  • Regularly Send Customer Statements that show aged invoices for shorter time periods. Instead of using Current, 30, 60, 90 days for aged invoices use Current, 15, 30, 45 days for aged invoices.
  • Offer customer early payment discount if paid within 10 days. i.e. 2% 10, Net 30
  • Offer pre-payment discount of 5%. This can really help because you are collecting the money before the invoice is even generated.
  • Accepting Credit Cards can also be an attractive way for customers to pay at the time of placing the order.
  • Use email, USPS Mail, and telelphone calls to contact customers when payments are past due.
  • Make detail notes each time a customer is called for payment. Also check the following information from the customer: person you spoke to, promised payment date, payment amount and if possible check number.  Also include a call back date so if payment is not received another phone call can be made with reference to previous conversation promised payment.
  • Sending reminder letters of invoices due.
  • Include standard comments on the bottom on your invoices to encourage timely payments.
  • Include positive comments on Customer Statements when a payment is posted. Typically thanking the customer for their timely payment.