Wednesday, 31 July 2013

Accounts Receivable Past 90 Days Due

As a result of the Klippers arrears Council has implemented a new policy regarding over due accounts. The policy is fairly straightforward: once an account is more than 90 days overdue then the account is brought before Council to see what action steps have been taken. The 90 day mark is as an identifier for risky accounts is a common business practice. Most accounts are for a modest amount of money ranging from less than $5 to $1,500 rather then the Klippers' amount.

If such a step had been taken at the 90 day mark then Klippers' arrears could have been dealt with in a timely matter.

Here is the process for accounts that are in arrears.



1.     Once an account is 90 days overdue a call is made to the customer requesting that payment made or to make arrangements for payments.  At this time we check for any problems the customer may have with the invoice.   We normally call each customer twice before proceeding further. At this time Council is informed of 90 day overdue accounts.

2.     If no payment is received after the second call a copy of all unpaid invoices along with a statement are sent to the customer.  This statement contains a notification that if payment is not received within 30 days their account will go to collections.

3.     After the 30 days if no payment has been received the account is sent to collections.  The Town of Kindersley is currently using Credit Bureau Collections as their collection agency.  Credit Bureau will register our collections against the customer’s credit rating if possible.

4.     Once a year a report is presented to Council requesting that accounts be written off and the reason why.  The main reasons that we take an account to council to be written off are:
          a.      The customer cannot be located.
          b.     The account has been in collections for more than a year with no action.
          c.      Errors on the account were determined after the close of the year.
          d.     The amount of the account is too small to send to collections.

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