Billing and Collections: An SOP Discussion

Standardized operating procedures for your company’s billing and collections departments can directly and positively impact cash flow and revenue, reduce costs and employee labor, and help identify and minimize account aging and attrition. Billing and collections SOP’s might involve the use of automated software programs and automatic payment processes, such as ACH or credit cards.

Effective billing SOP’s include:

• A standardized billing cycle for all subscribers (on the same day every month, for example);
• Form bills;
• Procedures for receiving, processing and posting payments;
• Procedures for regularly reviewing customer accounts;
• Criteria for identifying repeat, late-paying customers;
• Procedures for putting delinquent customers into collections.

Standardized and automated collections procedures also increase the potential for recovering revenue from non-paying subscribers. These SOP’s could include:

• Procedures for managing  communications from customers in collections;
• Form letters to subscribers at 30 and 60 days past due;
• A form cancellation notice at 90 days past due;
• Procedures for accepting payments and removing accounts from collections;
• Procedures for referring cancelled accounts for legal action.

The more standardized billing and collections procedures are, the less likely it is that delinquent and aging accounts will go unnoticed, and the more likely that accounts receivables will be collected.

Click here to read our most recent white paper, Standard Opportunistic Procedures, to learn the full value of effective SOP’s.