Accounts Receivable (4 of 4): Handling Difficult Collections - John M. Leask II CPA/ABV, CVA

Accounts Receivable

Part 4 of a 4 part series

Warning Signs:

    • Receivables exceed 50 days outstanding.
    • Days receivables outstanding increases significantly.
    • Significant decrease in sales/receivables.


  • Balance the firm’s collection attitude with genuine concern for the client and customer service.
  • Personalize your concern for the client while collecting forcefully.
  • Use increasingly harder demands for collections.
  • Use dunning letters and telephone follow-ups.
  • Keep notes on all collection contacts.
  • Report problem clients’ payment status to management and sales management.
  • Convert to notes payable.
  • Hire a collection manager or agency to boost cash flow.
  • Watch for changes in the collection trends and notify management.
  • Study write-offs, returns and allowances to identify problems, then solve them.

Back to The Business Doctor

>>Accounts Receivable (1 of 4): Control
>>Accounts Receivable (2 of 4): Extending Credit
>>Accounts Receivable (3 of 4): Speeding Collections
>>Accounts Receivable (4 of 4): Handling Difficult Collections