Collection Plans: Not just for Debt Mitigation

Often times in Collections Management, users are tracking accounts receivable and late payments from customers. But one exciting new feature of Collection Plans for Collections Management is the ability to enter negative days as a first collection step.

When setting up a Collection Plan, you can actually create a first step with a negative days quantity. In this case, we have decided to setup a new Collections letter that will email our customers when they are approaching the deadline for receiving an early payment discount.

In this case, let’s say our discount is 2% Net 20: if they pay within twenty days of the original invoice we set to be due Net 30 (payment due within 30 days of invoice date), we will grant them a 2% discount We have decided to send them a reminder 3 days before this date as a reminder to complete their payment to be eligible for the discount.

First, let’s setup a new Letter ID for this friendly reminder.

1. Go to the Sales Pane —> Cards —> Collection Letters
2. Enter a Letter ID, subject, and letter to send to your customers and Save. In this case we use Collection Management’s text letter feature:

Since the discount is available for payments made before 10 days before the due date, and we want a reminder 3 days before that, we need a 13 day lead on the due date.

Next, we should set up an Action ID:

1. Go to the Sales Pane —> Cards —> Collection Actions
2. Name the Action ID and Account Description, choose an Action Type of None, and select the Letter ID we just created. We can also choose to Automatically Mark as Completed
   

In the Collection Plan maintenance window (Sales pane —> Cards —> Collection Plans), open your Collection Plan and for step 1, set the days field at -13. Assign the new Action ID we created as the action for that step.

Now you can use the power of Collection Plans to increase customer retention and satisfaction while furthering your goals to improve your rate of return and meet your targets for the Statement of Cash Flows!

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