Collections Standard Operating Procedure
Purpose
Systematic approach for managing accounts receivable through automated communications and manual intervention to maintain cash flow and minimize bad debt.
Responsibilities
- Billing: Monitor automated collections, execute manual interventions, maintain records
- Customer Service: Handle inquiries, disputes, and payment arrangements
- Management: Approve write-offs and collection agency referrals
Collection Timeline
Invoice Generation (Day 0)
- Send invoice immediately with Net 30 terms
- Ensure accurate billing and contact information
- Set automated follow-up flags
Automated Email Sequence
| Days Past Due | Action | Tone |
| -10 | Pre-due reminder | Friendly |
| 0 | Payment due notice | Professional |
| 7 | First past due | Direct |
| 14 | Second past due | Firm |
| 21 | Third past due | Serious, service suspension warning |
| 30 | Final automated notice | Final notice, manual review flagged |
| 37 | Pre-call warning | Phone contact notification |
45 | Call Client |
Manual Collection (45+ Days Past Due)
- Phone Contact Required: Within 2 business days
- Documentation: Date, person contacted, conversation summary, commitments
- Guidelines: Professional tone, confirm details, negotiate arrangements
Payment Arrangements
- Minimum 25% down payment (balances >$1K)
- Maximum 6-month terms
- Written email confirmation required
- One missed payment voids arrangement
Key Requirements
- Compliance: FDCPA compliance, no harassment, 8 AM-9 PM calling hours
- Documentation: 7-year retention, all communications logged
- Disputes: Suspend collection pending resolution (5-day investigation)
- Reviews: Weekly email monitoring, monthly performance analysis, annual SOP review
Document Control
Version: 2.0 | Review Date: Annual | Key Changes: Automated system alignment, performance metrics