This document outlines a debt collection procedure with escalating steps to guarantee results. It includes: 1. Sending statements for invoices not due and contacting top debtors before invoices are due. 2. Issuing up to three recovery letters of increasing urgency to purchase ledger staff and supervisors for accounts overdue by 1-32 days. 3. Passing accounts overdue by 33-40 days to a solicitor to send a letter before legal action and considering litigation for those overdue over 41 days.

1. 1
Debt Collection Procedure tha will guarantee to get you the results
In order to maximize cash flow, meet the business DSO and overdue objectives, it is important to
adopt the following collection methods and timetables.
Invoices not Due – 0 to 30 days Sales Statement of account sent.
All Top Debtors to be contacted 7 days prior to
Invoice due date. (Top Debtors 10k and over).
Overdue 1-8 days
(31 to 38 Days from invoice date)
Issue debt recovery letter number 1 addressed to
Purchase ledger clerk, asking for payment within 7
days.
Overdue 9 – 16 days
(39 to 46 Days from invoice date)
Telephone call to enquire when payments will be
made, or obtain reason for non-payment –
If query on invoice, notes on account and contact
relevant member of sales admin staff to resolve
problem.
Overdue 17 – 24 days
(47 – 54 Days from invoice date)
Issue debt recovery letter 2 addressed to Purchase
ledger supervisor, requesting immediate payment.
Overdue 25 – 32 days
(55 – 62 Days from invoice date)
Issue debt recovery letter 3 addressed to customers
FD and place account on stop.
Overdue 33 – 40 days
(63 - 70 Days from Invoice date)
If the account is still unpaid after debt recovery letter
3, request approval from your company’s MD/CFO to
pass debt to acting solicitor – for a 7 day LBA letter:
(letter before action) to be sent.
Overdue 41days
(71 Days of invoice date)
Request approval from MD/CFO to initiate
proceedings for recovery.
Commencement of Litigations CEO/CFO discussions to be held with a view to
putting certification on hold, and possibly a
suspension of future trading.