Written Collections Policy for Small Businesses

Variables to fill in

The template

Select all and copy. Replace the {{double-brace}} placeholders with your details.

[BUSINESS NAME] — ACCOUNTS RECEIVABLE COLLECTIONS POLICY
Effective Date: [Date]
Approved By: [Name / Title]
Review Schedule: Annually or upon significant process change

─────────────────────────────────────
PURPOSE
─────────────────────────────────────
This policy establishes the standard procedures for managing overdue accounts receivable, ensuring consistent and professional invoice follow-up across all client engagements.

─────────────────────────────────────
PAYMENT TERMS
─────────────────────────────────────
All invoices are due: ☐ Upon receipt  ☐ Net 15  ☐ Net 30  ☐ Net 45  ☐ Other: _______
Late fees apply after: _______ days at ______% per [month / annum]
Grace period (if any): _______ days

─────────────────────────────────────
FOLLOW-UP SCHEDULE
─────────────────────────────────────
Day 1 (Invoice Date):      Invoice sent with clear due date and payment instructions.
Day [X] (Before Due Date): Friendly reminder email sent.
Day 1 Overdue:             Automated or manual reminder via email.
Day [X] Overdue:           Phone call or AI-assisted follow-up call.
Day [X] Overdue:           Second written notice / demand letter.
Day [X] Overdue:           Final notice — escalation warning issued.
Day [X] Overdue:           Referral to [external collections / legal / write-off].

─────────────────────────────────────
ESCALATION CRITERIA
─────────────────────────────────────
Accounts are escalated to [collections / legal counsel] when:
  • Balance exceeds $[Amount] AND is more than [X] days overdue.
  • Client has failed to respond to [X] contact attempts.
  • Client disputes without supporting documentation after [X] days.

─────────────────────────────────────
WRITE-OFF CRITERIA
─────────────────────────────────────
An account may be written off as bad debt when:
  • All follow-up steps above have been exhausted.
  • Legal cost of recovery exceeds the outstanding balance.
  • Client is confirmed to be insolvent, dissolved, or bankrupt.
  Approval required from: [Name / Title] before any write-off.

─────────────────────────────────────
RESPONSIBILITIES
─────────────────────────────────────
AR follow-up owner: [Name / Role]
Escalation authority: [Name / Role]
Legal referral contact: [Attorney / Agency Name, Phone]

─────────────────────────────────────
EXCEPTIONS
─────────────────────────────────────
Any exception to this policy requires written approval from [Name / Title] and must be documented in the client file.

─────────────────────────────────────
POLICY HISTORY
─────────────────────────────────────
Version 1.0 — [Date] — Initial policy adopted.

This template is general-purpose educational content, not legal advice. State law varies and attorney review is recommended before use. Syntharra is not your attorney.

Once your policy is written, Syntharra enforces the follow-up schedule automatically — no spreadsheet tracking required.

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