Manage open invoices

Check the status of outstanding invoices regularly. This will enable you to identify past-due accounts right away—a critical first step in collecting late payments sooner. It also provides insight about customer payment patterns. You might spot a candidate for additional goods and services, or decide to extend the credit limits or offer discounted pricing for customers with good payment habits.

QuickBooks aging reports can help you do this. Find the overdue payments in these reports and take action on them based on your collections strategy.

• The A/R Aging Summary report shows the total amount each customer owes and what portion of their balance is overdue.
• The A/R Aging Detail shows what invoices and statement charges are due or overdue.

Identify potentially uncollectable accounts as early as possible, and seek payment with persistence. Any of these could be warning signs of future bad debt:

• the customer cannot be reached, or is non-responsive
• the customer is recalcitrant, argumentative, or non-communicative
• a historically reliable customer displays a sudden change in behavior

If it becomes necessary to take additional actions to collect on a bill, it’s helpful to be able to access all of the relevant history in one place. Keep a binder or an electronic record of accounts receivable history.

As you manage the open invoices associated with your business, you might consider reporting your customers' payment behavior to the industry through Dun & Bradstreet. Your customers who pay on time will be recognized for their responsibility, and your poor-paying customers will be "on record" for their late payment.