Small companies don’t have a collections manager.  They don’t have a department or even one person whose sole job it is to keep on top of overdue invoices.  It is usually the accounts receivable clerk.  Then if it needs to be escalated, the controller or someone else in management gets involved.
The problem with this is that it is usually a manual process.  Statements are sent out each month and most companies with overdue invoices pay up – usually much later than the payment terms on the invoice. Someone also occasionally looks at an AR Aging or an overdue invoice report and personally contacts those companies with severely overdue accounts.

The Problem

This approach has several inherent problems:

• It is manual
• It is not timely
• It is not proactive

The Solution

There are several pieces to a complete solution and it depends upon your company.  Today we are going to concentrate on an example of collections workflow in NetSuite.  (If you have another software with workflow capabilities you may be able to use this example and duplicate these steps.)
When you look at this example it is important to keep the following in mind:

• NetSuite allows you to customize any workflow. (You can even create new workflows from scratch.)  Therefore you can change criteria, add extra actions and expand on the results.
• The complete workflow functionality is a core component of NetSuite. It is part of all systems. There is no extras that need to be purchased.
• The sample workflow we are using is available free of charge to all companies through a downloadable bundle.

Here is the workflow diagram and an explanation of what it does: 

1. The workflow is initiated when an invoice is 30 days overdue. [Top Block]

2. Is first notice [2^nd Block]:

a. If this is the first time for this loop in the workflow, then it will direct the CRM system to send out an email [4^th Block] to remind the customer that their invoice is overdue. It will then update the “Is Processed” Flag [5^th Block] and then return them to the top of the loop. [2^nd Block]

b. If this is not the first time it will direct the process to determine if the amount of the invoice is significant. In this case over $10,000.  [3^rd Block]

3. Is the amount over 10K [3^rd Block]:

a. If the answer is no, it will stay in the top loop.

b. If the answer is yes, the process will jump out of the loop to send a different email. [6^th Block]

4. Send Reminder Email [6^th Block]:  This is a different reminder message.

5. Create Phone Call [7^th Block]:  The CRM system will create and schedule a phone call for the appropriate person to call the customer and inquire as to the payment for the invoice.  This call will have a popup reminder in NetSuite and also appear on the Outlook calendar if you have it integrated.

6. The last action is to put the customer on Credit Hold.  That way no sales will be processed until their payment situation is corrected.

The Payoff

• Elimination of a manual tasks: Examining reports, composing and sending out emails, and scheduling activities and follow-ups.
• The automation runs on your schedule. If you don’t like to wait 30 days, you can have it activate when an invoice is overdue for 15 or 7 days or whatever.
• It is proactive. The process is in place before any invoices become overdue.  Most of the actions are done automatically.  The only time that a real person is involved is when they can be most effective – communicating directly with customer.

When you want to discuss workflow automation – give me a call. Tom White 305.819.6323 x 801