Debt Collection Procedures

Introduction

Effective debt collection procedures are essential for maintaining cash flow and fostering financial stability. This guide outlines clear steps, from setting payment terms to following up with reminders and legal actions, to ensure overdue invoices are managed efficiently and professionally. There are also some downloadable templates available that have been created by our finance director and legal team, free to use for our members.

Debt Collection Procedures

Payment Terms

Ensure your payment terms are clear and concise (eg due dates, penalties for late payment) are clearly defined in contracts, invoices, and agreements

Debt Collection Process

Ensure you send regular statements and have procedures to monitor, chase and escalate unpaid invoices.

• Track Invoices – Use accounting software to keep track of all outstanding invoices and payment due dates.