Collect Unpaid Balances
Payments from the customer account contact should arrive within 30 days after the invoices are sent. Account contacts/customers with accounts that are past due need to be contacted to collect payment in accordance with their signed credit account agreement.
Use the below guidelines to follow up on the collection process for consistency and accuracy. Ensure the steps taken are documented in the major account files.
Important: Before starting the collection process, confirm all unapplied payments are applied. See the Apply an Account Payment in CARRR topic for more information.
You must document the dates and steps taken to collect unpaid balances in the major account folder located in the store. Keep a log for each major account to track the invoice number, date invoice was sent/delivered, collection follow-up dates/action taken, and other applicable notes. Use the Major Account Activity Log to document the information.
Note: As each major account may have a unique account contact/customer, the entity is ultimately responsible for all major accounts linking to them. For example, if the campus has three major accounts (Campus Cards, ACCESS, and Financial Aid), all must be in good collection standing. Keep this in mind as you are pursuing collection, determining if major account holds or late fees should occur, and during collection discussions. Keep your RM informed of the progress or if their guidance/action is required.
Invoice and Collection Timeline
Invoice Status: Delivered
Store Action: Store submits/delivers invoice to the account contact/customer.
Day 1 -30
Invoice Status: Current
Store Action: N/A - Account contact/customer is to pay invoice by Day 30.
Day 31 - 90
Invoice Status: Late
Store Action: Store manager follows up with account contact/customer in one or both methods:
Day 91 and Greater
Invoice Status: Past Due
Store Action: Store manager continues to follow up with the account contact/customer for payment information. In addition, one or more of the following actions should occur. Also, consult with your RM to finalize the collection action.
- Collection call
- Collection letter
- Charge late/finance fees of 1.5% (See Apply Finance Charges/Handling Fees)
- Freeze major account to prevent further charges (See Disable a Customer Account)
- Disallow a new major account to be set up
The following actions will be taken by the home office:
- For major accounts associated with the campus, commission payments payable to the school will be withheld for all past due accounts.
- Unpaid invoices reaching 365 days or greater will be fully reserved. A reserve is similar to a write-off, as it is an expense that impacts the bottom line. However, the invoice remains in CARRR for future collection or until you initiate an adjustment to clear the balance from CARRR. See the Initiate New Adjustment topic.
Make every attempt to collect unpaid balances to avoid writing charges off. The older the balance, the harder it becomes to successfully collect. Make collection calls on the following schedule for 30, 60, 90, and 120 days. Prior to making each call, review the steps below to prepare for the call, execute the call, and steps to take after the call.
When a charge or charges are past 30 days, , call the account contact/customer to request payment using the Collection Call Tips document to assist you in your conversation.
Prepare for the Call
- Locate the account contact/customer name and contact phone number.
- Identify the total amount of open invoice(s) for all major accounts associated with the account contact/customer.
Execute the Call
- Call the account contact/customer phone number.
- Introduce yourself and the purpose of the call.
- Describe the situation.
- Request payment.
- Depending on the age of the open invoice, inform them that if payment is not received, their account will be put on hold and no further charges will be permitted. In addition, late fees will be added to the invoice.
- Ask for followup information.
- Why hasn't the balance been paid yet?
- When can Follett expect payment? Confirm a payment date before concluding the call or ask if you can call tomorrow to confirm a date.
After the Call
- Research additional information as requested by account contact/customer. Fax, mail or email documentation as needed, such as invoice copies if requested on the call.
- Email the account contact/customer a summary of the call and the promise to pay dates, or any other relevant information.
- Record notes from the call on the Major Account Activity Log and file in the major account file.
If you are unable to call the account contact/customer, send collection letters for all transactions older than 60 days, and again at 90 days. Complete the Collection Letter Template and mail, fax, or email to the account contact/customer along with a statement/invoice, and supporting documentation for the outstanding transactions, if required. Keep a copy of each document in the major accountfile.
When transactions are older than 120 days and no payment has been received, place the account on hold so no further transactions can be completed. See Disable Customer Accounts in CARP.
When transactions are older than 90 days and no payment has been received, charge the major account a late fee charge/finance fees of 1.5%. See Apply Finance Charges/Handling Fees.
When an invoice or selected transactions are deemed uncollectable, meaning you have exhausted all efforts to attempt to collect and/or unresolvable disputes exist, then initiate a Write Off to Bad Debt adjustment to remove the transactions from the CARRR aging. As a result, your store incurs an expense as a reduction of overall operating income.