In their booklet, "The Essential Guide to Getting Paid - practical solutions to improve cash flow," STA International also outlines a recommended collection control process, based on 30-day terms, to enforce payment. As with all such tools, this is a nice starting point to give you some ideas of your own. You'll need to think through what's unique about your own situation and adjust the strategy to match both your terms and the norms in your market. We actually suspect that this strategy is just a bit aggressive for most markets and situations and probably should be scaled back somewhat, but heh, we'll forgive STA, since we all know that their goal is to get you to place collectible accounts for collection.

In all written and oral communications, remind your customer of your late-payment interest policy.

After 31 days, send a polite reminder letter asking for payment.

Make telephone calls to overcome non-payment, working either from the highest balance or the highest risk category down.

At 55 days, an inquiry should be made to find out if there is any relevant reason why the invoice has not been paid.

At 75 days, send a demand letter stating your intention to pass the account to a collection agency or attorney at 90 days.

Intensify the telephone calls, reminding the debtor that you will take third-party action if payment is not made by 90 days.

At 83 days, send a final letter stating that failure to pay within 7 days will, without further reference to them, result in the debt being transferred to a third party for recovery.

At 90 days, transfer the account to a collection agency.

Don't Forget! - STA also adds the following very important considerations:

At every stage outlined above, make sure your sales colleagues are aware of their customer's poor payment habit and enlist their help to get paid. DO NOT continue supplying product or service!

All feedback from the above steps must be recorded in your ledger management system. For example, an "admission of debt" is admissible to prove your debt should litigation be necessary. Only two reasons for nonpayment now exist - they can't pay or they won't pay. In both situations, it is time for third party intervention.

There is generally no legal defense to a check that the customer has stopped payment on or is returned for Non Sufficient Funds (NSF).