What are we measuring: Invoices that are 31 days or more past due.
Why are we measuring this: Accounts receivable is the lifeblood of business’s cashflow.
Scoring: N/A
Recreate Metric: Invoice Module – Receivables. Filter Balance greater than 0. (Make sure you display 31-60, 61-90, 91+, sum these columns).
False Negatives:
Incorrect Invoice Terms - its important to audit terms regularly to ensure aging days match your contract agreements
Common Issues:
Slow payment input (receiving payments and not applying timely)
Lack of process standardization
Practical:
Utilize Collections Notes (Using Collection, Invoice, Payment, and Statement Notes) - Track your efforts
Set standards for when to stop work at a property, when to send to collections
Get multiple people involved in collection escalations (billing admin, account manager, sales manager, operations manager, branch manager)
Create multiple lists in invoices tab for various aging days categories (see below for list build ideas)
Resources
See below for Sample AR Process
Sample AR process
Aging Day 0 - Invoice sent
Aging Day 30 - Resend original Invoice - Create template saved in text editor and use for bulk email language. Utilize list in Invoices tab
Aging Day 40 - Accounts Receivable Outreach - first phone call
Aging Day 45 - Increase language intensity - bulk email
Aging Day 50 - Account Manager Outreach - Email/Phone Call Services Stop
Aging Day 60 - Email - From Branch Manager - Reference Stopping Services in 30 days
Aging Day 70 - Accounts Receivable Outreach - first phone call
Aging Day 80 - Branch Manager Call
Aging Day 89 - Sales Manager Final Call
Aging Day 90 - Services Stop
Aging Day 100 - Accounts Receivable Final Call
Aging Day 110 - Bulk Email Final Message
Aging Day 119 - Branch Manager Final Call
Aging Day 120 - Send to Collections