My bookkeeper does most of the collection work, but those who hit 75 days or so get to my desk. I spend about 15 hours per month on collections. There are a few reasons for this.
1. I get a personal view of whether to keep extending credit to the slow pay account.
2. The customer knows we are serious about collecting. Most folks are still at least somewhat intimidated by the "president" title.
3. I will spot trends of slow payment early. If good customers start to pay slow, it may portend something amiss in the business climate.
4. There are other reasons for slow pay that I want to know about. Maybe the customers are getting poor product or service and this is an act of rebellion. Maybe someone isn't posting credits. One time we had a rash of slow pays, and it turns out that we didn't mail invoices while the bookkeeper was on vacation.
5. I find out if my bookkeeper is doing a good job of collecting.
We have been sending out our first late notices at 60 days. This goes against my own teaching and most collection advice I have read. We are going to move that back to 45 days and see what the results look like. I will report later.
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