Our Accounts Receivable Policy - Cash Collections outlines essential procedures and guidelines for managing customer credit and the collection of accounts receivable. It focuses on enhancing cash flow management while minimizing bad debts through systematic processes. This policy emphasizes the importance of timely collections, proper credit approvals and maintaining professional relationships with customers. By establishing clear roles and responsibilities, this document ensures that all personnel involved in the credit and collection processes are aligned in their efforts to optimize financial outcomes for the organization.

This tool includes three sample cash collection policies. Sample 1 focuses on the procedures for collecting overdue invoices, detailing steps for identifying past-due accounts and initiating contact with customers. Sample 2 addresses credit and collection responsibilities, outlining guidelines for credit approvals and the importance of minimizing risks while maximizing profitability. Finally, sample 3 introduces the payment discrepancy tracker (PDT) system, providing a structured approach to handling payment discrepancies and ensuring consistency across departments. Together, these samples create a framework that facilitates effective cash collection and promotes financial stability within the organization.

Sample procedures include:

• Look up the invoice to ensure that there are no other invoices with the same PO number.
• Look up the customer’s contact information on the contact information spreadsheet when calling on an invoice.
• Always note in the comments database actions taken on each past due invoice and responses received or not received from the customer.
• Upon creation, the PDTs initiated by the credit analysts must be investigated and reviewed by the CSRs for validity.