Collections Operations

Collections is not an accounting function — it is a cash operations function. Every day a receivable sits uncollected is a day of cash you do not have. A structured collections process reduces DSO, minimizes bad debt, and converts booked revenue into actual cash. The companies that collect well are not the ones that harass customers — they are the ones that invoice accurately, follow up systematically, and resolve disputes quickly.

1. Accurate Invoicing The number one cause of late payment is invoice disputes — wrong amount, wrong contact, wrong PO number, missing documentation. Clean invoicing eliminates 40% of late payments. Validate every invoice against the contract before sending. Include the PO number, the correct billing contact, and itemized detail that matches the customer's procurement requirements.
2. Automated Dunning Cadence Day 0: invoice sent. Day 25: friendly reminder ("payment due in 5 days"). Day 32: first follow-up ("payment overdue — is there an issue we can resolve?"). Day 45: escalation to account manager. Day 60: finance-to-finance conversation. Day 90: formal demand. Automate days 0-45. Personalize 60+. Escalate systematically.
3. Dispute Resolution SLA When a customer disputes an invoice, the clock stops on collections but starts on resolution. Set a 5-business-day SLA to investigate and respond to any dispute. Unresolved disputes become permanent delayed payments. A fast resolution process is a fast collections process.