Five easy things you can do today to better collect your revenue tomorrow

Dec 19, 2024

We receive straightforward commonsense advice all the time. Keep your eye on the ball – if you play baseball. Cut once, measure twice – when cutting wood or fabric. And there’s the classic “stop, drop and roll” if you ever find yourself on fire. Simple, straightforward advice helps us focus on the most important thing we should do, despite many possibilities. 

In this article, we’d like to share some straightforward commonsense advice for billing and collection processes. These best practices may seem obvious to you. However, the devil is in the details – you may find it difficult to perform them consistently. Check in with your staff regularly and assess how you measure up.  

Here are our top five tips: 

  1. Be prompt. Send out invoices on time and begin collection efforts immediately after an account is past due (ideally the first day it is late). This is the single most important factor in receiving timely payment, but you must dedicate the necessary resources to this. 

  2. Make it easy for customers or debtors to pay you. Offer a host of payment options, methods and plans. If you offer payment plans, make sure you publicize options so that everyone has an equal opportunity to request them. 

  3. Use in-house collections as your primary means to collect. You are likely to have better success with this than with a collection agency, and you can avoid costly fees. That’s not to say you shouldn’t use collection agencies, but use them after you’ve made a good-faith effort to collect. 

  4. Maintain regular, consistent contact. You should maintain regular contact with the customer or debtor until the amount outstanding is paid, written off or referred to a collection agency. 

  5. Write off uncollectible accounts as soon as practical. Make sure you regularly write off uncollectible accounts so that your staff do not spend their limited time and resources attempting to collect them.  

For additional accounts receivable-related resources: 

  • Accounts Receivable Guide – This comprehensive resource can help you develop policies and identify best practices and other ways to improve your billing and collection process. Leadership, managers, supervisors and accounts receivable clerks can all find information tailored to them in this guide. 

  • Segregation of Duties Guide – This guide contains a chapter on accounts receivable and how to segregate duties (see Section 2, Chapter 2). It also suggests compensating controls when it's not possible to segregate duties due to the size of your staff. 

For help 

Remember, we are here to help. If you have specific technical accounting questions, please submit them using our HelpDesk in the client portal. 

We also have financial management specialists at SAO's Center for Government Innovation available to talk with you about best practices, resources or internal controls. For assistance, reach out to us at Center@sao.wa.gov.