sample accounts receivable collection policy

Just like a comprehensive credit policy, a collection policy should not be an off-the-shelf or one-size-fits-all product. Once the decision has been made to formalize a collection policy, it must be decided whether the policy will be formulated from scratch or whether the disparate pieces of the current collection structure can be melded into a cohesive outline. When and whether to turn the account over to litigation or write-off the debt.When internal or external “collectors” are used to step-up collection efforts.How they should be contacted, how disputes are resolved.Generally, a collection policy systemizes the steps taken to recover amounts due prior to litigation. This includes: Like a written credit policy, a collection policy serves as a window into the company philosophy as far as how credit and debt are treated.įurther, strict compliance with the collection policy as it’s written allows the business to be more streamlined, with no time wasted on deciding when or how to respond to a certain debtor situation. Similar to the credit policy as a whole, the collection policy should be written and strictly followed.

A collection policy is the set of procedures a company uses to ensure payment of accounts receivables.

Sample accounts receivable collection policy