Building a Collections Process

Start with a written cadence

Most overdue invoices are not disputes — they are simply forgotten. A written cadence removes guesswork by defining exactly what happens, and when, from the day an invoice falls due. Map each step: a friendly reminder a day or two after the due date, a firmer follow-up at seven days, a phone call near fourteen, and a letter of demand before the account ages past thirty. When the sequence is documented, anyone on the team can run it the same way, and nothing slips because one person is on leave. The goal is calm, predictable pressure rather than the occasional anxious scramble. A customer who knows your reminders are systematic — not personal — tends to pay sooner and stays a customer.

Segment your ledger

Not every overdue account deserves equal effort. Sort your ledger so attention flows to where it matters most:

• By value — a single large invoice may outweigh a dozen small ones.
• By age — the older a debt, the harder it is to collect, so newer arrears in large amounts come first.
• By risk — a customer who has broken promises before needs closer watching than a reliable payer who is simply late.

Working your highest-value, highest-risk accounts first protects cash flow and stops winnable debts from quietly ageing into write-offs.

Keep records of every contact

Every reminder, call, and promise should be logged with the date, who you spoke to, and what was agreed. Good records do three things: they let any team member pick up an account without re-treading old ground, they show a clear history if the matter escalates, and they protect you if a customer later disputes that they were contacted. A simple, consistent note in your accounting system is enough — the discipline matters more than the tool. When you eventually hand an account to a collector, this trail becomes the evidence that moves the file faster.

Know your escalation point

A process is only effective if it has a defined endpoint. Decide in advance how long in-house follow-up will run before you escalate — most businesses set this at thirty to forty-five days past due — and treat that line as a rule, not a suggestion. Beyond that point, every extra week of internal chasing tends to lower the odds of recovery while tying up your team on work that is no longer paying off. Setting the threshold ahead of time, while you are calm rather than mid-chase, keeps the decision rational. When in-house follow-up stalls, a commission-only agency such as Merion can take over — refer a debt. Knowing where your line sits is what keeps you from carrying ageing debt out of optimism.