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Started By
Message
re: Collecting accounts receivable
Posted on 9/18/25 at 6:22 pm to ninthward
Posted on 9/18/25 at 6:22 pm to ninthward
quote:
small claims court or big court, depending on the amounts.
I avoid court at all costs. If anything, I file it with a credit bureau. That way their ability to borrow money is restricted unless I get paid.
0
Posted on 9/18/25 at 6:24 pm to Cosmo
I work for a fairly large company in the industry and we are on credit hold with some vendors for an unpaid $500 invoice. The accountants all playing games with each other.
Posted on 9/18/25 at 6:24 pm to Rex Feral
Goodness that’s disheartening
Posted on 9/18/25 at 6:28 pm to Cosmo
quote:
I wouldn't provide a service without immediate payment at this point
Then you would be out of business
Posted on 9/18/25 at 6:28 pm to Cosmo
quote:
I wouldn't provide a service without immediate payment at this point
Aren’t you a doctor? As a doctor myself I know that we don’t always get paid and then we don’t get to Bill ahead of time.
Posted on 9/18/25 at 6:28 pm to Rex Feral
collections start before deliveries are made. FTR i work in the construction industry. Keep in mind that selling to a slow payer is a complete waste of time. i have cut off personal friends. awkward.
-our expectations are "X". or, if your customer is being paid by someone else...."have you worked for this owner before? how did that job go? did you have problems with change orders? Have you ever paid with CC? we accept CC (add 30 days to the cycle). Received cash back or points? Do you know about BILLD?
-after the invoice is sent - did you receive everything? did everything look to be accurate?
-what is you invoicing cycle? how has this owner done on this job thus far? are there any change orders? or other issues?
-if a problem arises....you must know ASAP. offer to make a call to the owner to shake some money out of the money tree.
-when you are about to lose commission...tell them you are going around them to the owner.
hope some of this jibber jabber helps.
-our expectations are "X". or, if your customer is being paid by someone else...."have you worked for this owner before? how did that job go? did you have problems with change orders? Have you ever paid with CC? we accept CC (add 30 days to the cycle). Received cash back or points? Do you know about BILLD?
-after the invoice is sent - did you receive everything? did everything look to be accurate?
-what is you invoicing cycle? how has this owner done on this job thus far? are there any change orders? or other issues?
-if a problem arises....you must know ASAP. offer to make a call to the owner to shake some money out of the money tree.
-when you are about to lose commission...tell them you are going around them to the owner.
hope some of this jibber jabber helps.
Posted on 9/18/25 at 6:29 pm to Rex Feral
quote:
What do you do?
I think he got some type of medical degree from the Caribbean
Posted on 9/18/25 at 6:33 pm to Mingo Was His NameO
Retired Controller here who mostly worked for small to medium companies.
1. Commissions are only paid when invoice is collected. That way you have the salesman working on collections plus you are not in the negative on cash flow.
2. New customers, call and verify the payment procedure and follow their procedures. If you don't then they have a lame reason to delay payment.
3. Most large invoices have 30 day terms. At the 15 day mark, call and verify receipt of your invoice and make sure it is acceptable to them.
4. At the 35 day mark, call and ask who is the person deciding on what invoices to pay. Talk to that person. Keep records on all comments so you can follow up and get the salesman involved.
5. If they go past 60 days then future business requires a down payment. If they refuse, cut them off. You are better off using your resources on customers who pay you.
6. Definition of pressure, you go to work on a Monday, payroll is that Friday and you can't cover it. Steps 1-5 are designed to relieve the Monday of pay week pressure.
1. Commissions are only paid when invoice is collected. That way you have the salesman working on collections plus you are not in the negative on cash flow.
2. New customers, call and verify the payment procedure and follow their procedures. If you don't then they have a lame reason to delay payment.
3. Most large invoices have 30 day terms. At the 15 day mark, call and verify receipt of your invoice and make sure it is acceptable to them.
4. At the 35 day mark, call and ask who is the person deciding on what invoices to pay. Talk to that person. Keep records on all comments so you can follow up and get the salesman involved.
5. If they go past 60 days then future business requires a down payment. If they refuse, cut them off. You are better off using your resources on customers who pay you.
6. Definition of pressure, you go to work on a Monday, payroll is that Friday and you can't cover it. Steps 1-5 are designed to relieve the Monday of pay week pressure.
Posted on 9/18/25 at 6:33 pm to CR4090
quote:
Depending on our business, that is not going to work. I work for a small import/export family-owned company. The customers are not going to pay $30K upfront. And sometimes, they are waiting on payment from their customers. So it's a headache to stay on top of it, but that's the way it works for us.
excatly!!
You get paid when I get paid
Posted on 9/18/25 at 6:36 pm to LSUJML
quote:
Customers are extending their payment terms
Dude, oil companies and oilfield service companies have been paying on 90-120 days for 30+ years
Posted on 9/18/25 at 6:43 pm to Rex Feral
quote:
Anyone work for themselves or AR for a business notice that customers have been slower than usual paying open invoices?
No not really. I have some usual suspects when it comes to AR, but I usually begin letting them know at 45. Squeaky wheel gets the grease. I do have some customers who are national accounts, SpaceEx being one that is off the top of my head that has a net 90 agreement with my company. Which kinda annoys me.
This post was edited on 9/18/25 at 6:47 pm
Posted on 9/18/25 at 6:44 pm to Purplehaze
quote:
1. Commissions are only paid when invoice is collected. That way you have the salesman working on collections plus you are not in the negative on cash flow.
Do you want your sales reps to be sales reps or collection agents?
Posted on 9/18/25 at 6:49 pm to profdillweed
quote:
Dude, oil companies and oilfield service companies have been paying on 90-120 days for 30+ years
Correct
The ones that have been net 30 or 60 for years are now net 90
Posted on 9/18/25 at 6:53 pm to Rex Feral
I work for a mid-sized manufacturing firm in the Accounting & Finance Dept.
I can tell you with certainty that the only suppliers who will put you on credit hold quickly or suspend services gets paid on time, and everybody else gets paid 3-4 weeks late.
Logistics and freight forwarders get paid first, and on-time. They can bring manufacturing and supply chain to a dead stop. Do you know who gets paid last? Consultants, Law Firms, Audit & External Accounting firms.
The most important question is who needs who more? If the vendor needs the paying company's business more than the company needs that specific vendor's product or service, then the vendor is going to wait.
I can tell you with certainty that the only suppliers who will put you on credit hold quickly or suspend services gets paid on time, and everybody else gets paid 3-4 weeks late.
Logistics and freight forwarders get paid first, and on-time. They can bring manufacturing and supply chain to a dead stop. Do you know who gets paid last? Consultants, Law Firms, Audit & External Accounting firms.
The most important question is who needs who more? If the vendor needs the paying company's business more than the company needs that specific vendor's product or service, then the vendor is going to wait.
Posted on 9/18/25 at 6:59 pm to grizzlylongcut
If you pay a salesman commission based on invoice date then they have no incentive to even attempt to help accounting collect over due invoices. They tell you that is not my job. My answer was to cut the customers credit limit in order to get some help in collecting.
Salesmen would always tell me, you can't put my customer on hold or cut their credit limit., they represent a large portion of our sales. My reply was they are averaging 110 days to pay, how do I cover payroll? And by the way, I am not paying your expense account until these invoices get paid.
They go crying to the owner who eventually says to keep on selling to the deadbeat customer and pay the salesman expenses. That's is when I take out my cash projection and tell the owner payroll next week will not be covered. How does he plan on getting me the cash to cover it? Now it gets really interesting.
Remember this, the most important thing a company does is not sales, it is getting paid for the sales.
Salesmen would always tell me, you can't put my customer on hold or cut their credit limit., they represent a large portion of our sales. My reply was they are averaging 110 days to pay, how do I cover payroll? And by the way, I am not paying your expense account until these invoices get paid.
They go crying to the owner who eventually says to keep on selling to the deadbeat customer and pay the salesman expenses. That's is when I take out my cash projection and tell the owner payroll next week will not be covered. How does he plan on getting me the cash to cover it? Now it gets really interesting.
Remember this, the most important thing a company does is not sales, it is getting paid for the sales.
Posted on 9/18/25 at 7:01 pm to Rex Feral
quote:
Accounting. I don't collect a retainer. Almost all of my billings come from returning clients. I've done a good job of weeding out deadbeats. Our write offs are usually less than 1.5% of total billings.
My 90 days past due is usually so small I don't even look at it on a regular basis. The conversation I had to day was the only reason I went over it.
You can either do collections yourself but that's tough of you're not educated in it. I would contract with an AR firm that works on a commission bases (ours only takes 10 percent of what they collect, unless it ends up in court). The outside agency will send demand letters and nasty grams to collect .. or help you negotiate payment plans for those who can't pay right now.
.
Posted on 9/18/25 at 7:05 pm to Purplehaze
Neal is absolutely correct. The first group that gets paid is payroll, payroll taxes, rent and utilities. Everyone else can be a crapshoot.
As the Controller of a small company, controlling cashflow is your most important function. Sometimes you just have to say no.
As the Controller of a small company, controlling cashflow is your most important function. Sometimes you just have to say no.
Posted on 9/18/25 at 7:06 pm to Rex Feral
Time to call Vinny and Guido.
If you are publicly traded make sure this can’t be traced back to you or your company.
If you are publicly traded make sure this can’t be traced back to you or your company.
Posted on 9/18/25 at 7:07 pm to Purplehaze
quote:
Purplehaze
You sound like a real piece of shite, on multiple fronts
Posted on 9/18/25 at 7:40 pm to Mingo Was His NameO
Working for small companies, I always collected the AR, never missed payroll, never missed tax payments and kept the company afloat. In so doing, many people kept their jobs. If I had to be an a-hole in order to do that, then so be it.
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