9 Account Collection Mistakes

In an ideal world, your customers would pay their invoices immediately and you would keep your account books nicely balanced. However, in the real business world, you usually need to diligently follow up on to collect from your customers.

Here are some common mistakes that you should avoid:

1. Making payment errors

A common mistake is when payment information is applied to the wrong account, is applied twice to the same account or applying the wrong numbers into the account. There's a big difference between £1,090.00 and £1,900.00.

2. Not logging in payments promptly

When you receive payment, you should make sure you apply it into your promptly. If you don't, you will run the risk of not knowing whether the payment has been made or not.

3. Keeping hold of invoices for too long.

Invoices should be sent immediately when either the service or the sale of a product is completed.
If you have a regular customer who orders every month and they receive a recurring invoice from you, then you should make sure to promptly send the invoice at the same time every month.

4. Not setting up a Standard Policy

From the start, you should have a collection policy in place that makes it clear to your customers when a payment is due and what would happen in the event of late payment. If there is a fee for late payment then make sure your customers know.

5. Not following up thoroughly

Once an invoice is sent and payment is past the due date, you need to have someone in your company to follow up and collect the payment. This person will need the necessary information at hand when making the repeated efforts to collect the payment.

6. Failing to keep your database up-to-date

Many payments are not collected because invoices are sent to the wrong (old) address or because someone new is handling the payables and are at a different location. These information changes should be addressed and updated straight away. From time to time, you could contact your customers to make a general information enquiry to help keep your customers details up-to-date.

7. Not spotting and addressing problems early

When you deal with your customers, you often can notice if it is routinely hard to receive payment or that you often need to rigourously and aggressively follow up to collect from some specific accounts. If this is the case then you should address these situations and sort it out early on. You could perhaps, agree on a new payment schedule which would make it easier for your payments to be received on time. Never leave such problems for too long.

8. Allowed to be given the run-around

Don't allow companies to brush you away, avoid your calls, not answer your questions or keep on giving you excuses. Don't allow to be taken for a run-around. Be persistent and aggressive if needed.

9. Not increasing your persistence in your collection attempts

If your payment has gone past it's due date then you have to be more persistent in following up on your debt collection. Sometimes you will have to be agressive, which is ok, as long as you follow the law applicable payment collection practices.


Of course there are more account collection mistakes that can be avoided but these are my top 9.
Feel free to add yours in the comments.