12 Step Program to Collect A/R Faster

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Understanding the Debtor’s Psychology

Many debtors believe that if an invoice is 180 to 360 days past due, they’ll never have to pay it—at least not in full. Others simply take their time, knowing they won’t face serious consequences. But slow-paying customers can be “retrained” into becoming reliable, profitable long-term accounts—with consistent, proactive attention.

Here’s the hard truth:

  • If you allow late payments, customers will pay late.
  • Cash flow suffers when customers dictate your terms.
  • If you don’t follow up, they assume you’ve moved on.
  • Bad debt grows from neglected receivables.

In fact, debts are 200% more likely to be collected if assigned at 90 days past due compared to 360 days. Collections isn’t personal—it’s a business necessity. If you don’t collect what you’re owed, it means your competitors get to the head of the line for payment.

Routine A/R Collections Is a Production Job

Accounts receivable management isn’t just about follow-up—it’s a production process that can be engineered for efficiency. With a clear strategy, the right tools, and consistent execution, you can significantly reduce DSO, improve cash flow, and cut delinquencies in half—or more.

Here’s a proven 12-step program to improve your collections:

Create Clear Credit & Collection Policies

Don’t leave it to chance or individual discretion. Every company—large or small—needs a documented credit and collections policy. It should define:

  • Credit limits and terms
  • Contact frequency
  • Escalation paths
  • When to restrict credit or assign accounts to an agency

Share your policy with customers at onboarding, ideally as part of your credit application. If not, send it afterward to set expectations early.

Prioritize for Impact

Focus your team’s effort where it counts—on accounts with the greatest cash flow potential or highest risk. If possible, use tools that prioritize by aging, amount, and risk scores. For aging accounts or overflow work, consider outsourcing to a professional agency like Leib Solutions to maintain consistent follow-up.

Set Performance Standards

Collections is a job—so treat it like one. Without clear performance metrics, staff may avoid the uncomfortable task of asking for money. Set and track KPIs such as:

  • Daily calls and emails
  • Promise-to-pay rates
  • Disputes resolved
  • Monthly cash targets
  • DSO improvement

Assign Goals by Team and Collector

Set monthly and daily goals for each collector and department. Use reporting to track:

  • Activity (calls, emails, touches)
  • Cash collected
  • Disputes resolved
  • Broken promises

Match collection goals to company-wide cash flow objectives. Transparency keeps teams aligned and accountable.

Use E-Signatures and Online Credit Apps

Speed up the credit approval process with automated applications and e-signatures. This streamlines onboarding and eliminates faxing and delays. Use the same tools for promises-to-pay or settlement agreements to reduce friction and save time.

Standardize Emails and Scripts

Don’t let each team member create their own communication strategy. Provide:

  • Collection email templates
  • Call scripts
  • Voicemail messages

These should reflect your brand’s professionalism and tone. Use snail mail only when necessary (e.g., final notices, certified demand letters).

Make It Easy to Pay

Offer multiple payment options for small and mid-size customers:

  • ACH
  • Credit card
  • E-check

Removing payment barriers increases compliance and reduces excuses.

Keep Contact Info Up to Date

Always collect and verify:

  • AP email address
  • Controller’s contact
  • Executive contact (for escalation)
  • Cell phone (for small business owners)

Add these fields to your credit application. Too many companies delay collections simply because they don’t know who to call.

Use Workflow and Automation Tools

If you’re managing receivables on spreadsheets, it’s time to upgrade. SaaS platforms like Carixa automate routine tasks, organize workflows, and ensure consistent follow-up. The result: faster collections, lower DSO, fewer disputes, and reduced overhead.

Accelerate the Collection Cycle

Don’t wait 30 days to start collecting. Proactive follow-up makes all the difference:

  • Send a friendly reminder a few days before the due date
  • Call if no response within 3 days
  • Escalate quickly if payment is delayed

Use email for everything—invoices, follow-ups, supporting docs. It removes excuses and speeds resolution. And don’t hesitate to apply credit holds when necessary.

If you’re getting nowhere, assign the account to a collection agency and move on to current A/R.

Train Your Staff

Collections requires skill and confidence. Train your team on:

  • Phone etiquette and negotiation
  • Conflict resolution
  • Your internal collection policies
  • Legal considerations (e.g., FDCPA for consumer accounts)

Professional training, role-playing, and coaching go a long way—especially with new or hesitant collectors.

Use Collection Agencies Strategically

When customers don’t pay, it’s time to escalate.

  • First-party outsourcing (under your name): Great for early-stage receivables and can be highly cost-effective.
  • Third-party collections: Traditional agency model with contingency fees—no collection, no fee.

Too many companies wait until an account is uncollectible before assigning it. That’s a policy failure. Assign accounts when they still have value.

As the saying goes: “75% of something is better than 100% of nothing.”

Take the First Step Today

A solid collections program doesn’t build itself—it starts with a decision and a plan. If you’re ready to improve cash flow and reduce bad debt, Leib Solutions is here to help with decades of experience, powerful systems, and personalized service.

Contact us today to learn how we can optimize your receivables and recover what you’re owed—faster.