Chasing Overdue Accounts

An invoice is 40 days old on 30-day terms, nobody has phoned the customer, and nothing in BigLedger has flagged it. That is normal: BigLedger sends no reminders and does nothing about lateness by itself. This guide is for whoever collects the money: the credit controller or the receivables clerk. By the end of this guide you will have a weekly collections routine: a list of who to chase, in order; statements that reach the right inbox; a record of what each customer promised; and a way to tell at the end of the month whether the chasing worked. Setting it up takes about an hour. After that it is about thirty minutes every Monday.

Chasing overdue accounts, at a glance

Apply receipts to invoices first. A payment with no contra leaves its invoice looking unpaid, and you will chase a customer who has already paid (Before you start).

1. Build Monday’s list from the ageing: Finance > Debtor Report > Aging Report for every company, then the Outstanding Document Report for the call list (Step 1).
2. Chase in order, and write down every promise, as a date and an amount. BigLedger has no promise-to-pay record, so keep a collections log (Step 2).
3. Send statements that arrive. A run chooses customers only by category or sales agent, so give every credit customer a category. On a run you create, press Run, count the lines against your credit customers and check each line’s recipients, then press EMAIL ALL (Step 3).
4. Escalate on a ladder you wrote down in advance. BigLedger has no reminder letters and no automatic escalation (Step 4).
5. Take disputes off the collections list and get each one a decision (Step 5).

Steps 1 and 2 are on this page; Steps 3 to 5 are on Statements, Escalation and Disputes.

Meet GadgetSphere

GadgetSphere Distribution Sdn Bhd (GSD) has about 180 corporate customers on account, most on Net 30. The retail company (GS) has about forty trade accounts for accessories. The two companies share many customers. On a typical Monday, GSD has about RM 1.4 million outstanding, of which roughly RM 310,000 is past its due date.

The finance manager’s target is that nothing is more than 60 days old without a named reason.

What BigLedger does about lateness, and what it leaves to you

A payment term does two things in BigLedger. It sets the due date on an invoice when the invoice is raised, and the ageing reports use that due date. That is all. It does not warn, block, remind or charge interest. The background job that looks like it would stop late payers almost never does: it flags a customer for lateness only when an invoice is older than a payment term set for that invoice’s company on the customer’s company tab, and only if somebody scheduled the job or runs it by hand (see Stopping Supply to a Customer).

So every part of collections is a person’s job:

Before you start

• You can run the Debtor Report for every company in the group, and open the Statement of Account applet.
• Receipts are applied to invoices. A payment recorded without a contra against the invoice it pays leaves that invoice looking unpaid on every report below, and you will chase a customer who has already paid. If your team does not apply receipts routinely, fix that first (Credit Sales Workflow, Step 6). BigLedger never matches a keyed payment to invoices on its own. The person keying the receipt ticks the invoices, or presses an optional auto-settle that fills them oldest invoice date first and knows nothing of the customer’s remittance advice. So a customer who says “we paid 1041” may be right even while 1041 shows as open. Step 6 of that guide explains the rule, and the weekly check that finds receipts nobody finished applying.
• Each credit customer has an e-mail address on their record that reaches their accounts payable team, not their buyer.

Step 1: Build Monday’s list from the ageing

The outcome: a list of who owes what past due, oldest first, across the group.

Finance > Debtor Report > Aging Report

Select every company, move Transaction Date From back before your oldest unpaid invoice, leave Outstanding Only ticked, and search. Both date boxes open on today, and a one-day window lists nothing older. Each customer is one group, with the buckets across. Sort by the oldest bucket and work down.

For the detail, open the Outstanding Document Report. Rows past their due date are shown in red, with a Due Date and an Aging column. That is your call list: one row per invoice, with the reference the customer’s accounts team will ask for.

Two things about where these numbers come from:

• They are built from documents, not from the ledger. Each figure is the open balance on the invoice itself, reduced by the receipts, credit notes and contras applied to it. If a customer says they paid and the invoice is still open, the question is whether the receipt was applied to that invoice, not whether the ledger is wrong.
• “As of today” and “as at month-end” are different reports. The Aging and Outstanding Document reports show documents as they stand now. The two Historical reports show the position frozen at the end of a chosen month. A contra or a back-dated receipt can make the two disagree, and sometimes a settled document keeps appearing in the historical view. If it does, see Knocked off, but the balance hasn’t changed.

Step 2: Chase in order, and write down every promise

The outcome: every overdue account has a next action and a date.

For each customer on the list, most-overdue first:

1. Check it is really owed. Open the invoice, confirm no receipt is waiting to be applied, and confirm no credit note was agreed and not raised.
2. Contact the person who pays, not the person who buys. Quote the invoice number and the customer’s own PO reference from the invoice.
3. Ask for a date and an amount, not a promise to “look into it”.
4. Write it down. BigLedger has no promise-to-pay record and no collection notes against an invoice. Keep your collections log where the finance manager can read it, one line per contact: date, customer, invoices, who you spoke to, what they promised, and your next action date. A spreadsheet is fine. For a customer where the promise matters to the order desk, put it in the customer’s Alert Message too, so it appears on every new order and invoice for them:

Promised RM 38,000 by 30 Sep (spoke to AP, 23 Sep). Check before releasing new orders.

Next Monday, start with every promise that was due last week. A broken promise is the strongest signal you will get, and it is the point at which the escalation ladder moves up a step.

What success looks like

At the end of the month, in five minutes:

1. Run the Aging Report as of today and compare it with last month’s Historical Transaction Aging Analysis Report. The amount in the oldest two buckets should be lower. If it is not, the ladder is not being followed.
2. Open Collection Invoice with Aging for the month. Its Payment Days column shows, invoice by invoice, how long customers actually took to pay. A customer who is always twenty days late on 30-day terms has 50-day terms in practice, whatever the record says. That is a conversation to have (and possibly a term to change).
3. Every account over 60 days has a name against it in your collections log: a promise with a date, a stop, a dispute, or a proposed write-off.

Common mistakes

The mistakes in the statements and the disputes are with Steps 3 to 5: pressing RUN on a scheduled statement run without reading it first, assuming every customer is on the statement run, and mixing disputes with late payers. These belong to the whole routine:

Waiting for BigLedger to flag lateness. It will not. Terms set a due date and age a report. Nothing else happens until a person looks.

Chasing an invoice that was paid. The receipt is in the bank but was never applied to the invoice, so the invoice is still open. Check before every call, and fix the habit that caused it.

Chasing the buyer. The buyer placed the order and does not pay the bill. Get the accounts payable contact, and put their address on the customer record so the statement reaches them.

Related documentation

• Chasing Overdue Accounts: Statements, Escalation and Disputes — Steps 3 to 5
• Can This Customer Take More Goods? Deciding on Credit — what to do with the next order from a customer on this list
• Stopping Supply to a Customer — the stop at the top of the ladder
• Credit Sales Workflow — invoicing on terms and applying receipts
• Debtor Report — every report used in Step 1 and the success check
• Statement of Account — runs, selectors, recipients, and what a scheduled run does
• Credit Limits and Payment Terms — how a payment term becomes a due date