6 Ways to Handle Delinquent Customers With Collections Accounts Prioritization

What you’ll learn


  • Learn about delinquent customers and how they impact cash flow.
  • Explore the ways on how to handle delinquent customers to avoid bad debts.

Cash is the oxygen to your business. Any negative impact on your cash flow can critically affect your business’s ability to continue daily operations.

Delinquent customers and bad debts may often hold up your cash flow and erode your revenues. This impacts your profitability as well.

By definition, customers who do not settle their payments 30 days past the due dates are referred to as delinquent accounts/customers. So, how to handle the delinquent accounts?
To deal with delinquent accounts, the collections analysts have to design customized collection plans to recover the unpaid money.

Collections analysts communicate periodically with customers about their open invoices via emails, letters, and telephonic conversations. This process is called dunning. They also use a variety of customer data to identify at-risk, high-value customers. Building a prioritized collections worklist helps analysts save time and effort and have the right conversations with the clients. Dunning and prioritized collections worklists are some techniques that help collections analysts stay on top of delinquent accounts.

Let’s take a look at more ways to manage at-risk accounts:

Ways to Stay on the Top of Delinquent Accounts

1. Segment your customers

The best way to stay on top of your client accounts is by categorizing them. Segregation of customers based on AR aging reports, past payment history, payment amount, and other such buckets can help you identify the at-risk customers who are most likely to become delinquent.

To learn more about customer segmentation, check this blog on the benefits of customer segmentation and prioritization.

2. Manage customer relationships

You need to maintain healthy customer relationships even with delinquent customers. Don’t let your customer relationship suffer due to unpaid invoices. With delinquent customers, it is necessary to make sure that your dunning tone is friendly and courteous but also firm. Your primary focus should be to collect the unpaid amount without hampering the customer relation and jeopardizing future deals.

3. Automate your dunning

Sending periodic reminders can ensure that your accounts don’t become delinquent. Set up a well-defined collection system and send out automated dunning letters via emails. This will give you more control over the collection process. You will also get more time to personally contact delinquent customers.

Automate your dunning
Sources: PYMNTS

4. Make it easier for customers to pay

Have a structured and easy-to-follow payment workflow in your collections plan. Introduce multiple payment methods to make it easier for the customers to pay.

Make it easier for customers to pay

Providing multiple payment methods can enhance your customer relationships and reduce the chance of accounts turning delinquent. Want to learn more about digital payments methods? Check this blog on B2B digital payment landscape within mid-sized businesses.

5. Have a delinquent account collection policy

It is advisable to have a delinquent account collection policy that you can turn to when a situation of unpaid overdue accounts arises. Customers can be very hard to win and retain; therefore, establishing a fair policy is important. The policy needs to be strictly adhered to without any bias.

6. Set-up a customer dispute resolution system

Many times, the invoices become overdue because of disputes and the inability to resolve them on time. Any kind of disagreement between the buyer and the seller can result in disputes and resolving them can take a lot of time if not channeled properly. A documented systematic dispute resolution procedure can help you and your customers close open invoices faster.

To Sum It Up

Delinquent customers are tricky to deal with. A courteous yet firm approach can help you maintain customer relationships without hurting your receivables collections.

Companies are also turning to automation of their collections process to reduce delinquency rates. Automation technologies help address a variety of AR challenges and enable analysts to recover the accounts receivables smoothly.

At HighRadius, we have helped many businesses manage their delinquent accounts with ease. With the help of RadiusOne, mid-sized business owners can easily create a prioritized collections worklist, send automated dunning emails, handle dispute management, and close open invoices efficiently. Talk to our experts today to learn more about RadiusOne AR Automation Solutions.

Want to learn more about how to make a perfect collection call? Check this blog on Collections Call-101.

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The HighRadius RadiusOne A/R Suite is a complete accounts receivables solution designed for mid-sized businesses to put their order-to-cash on auto-pilot with AI-powered solutions. It leverages automation to fast-track key accounts receivable functions including eInvoicing & Collections, Cash Reconciliation, and Credit Risk Management powered by RadiusOne A/R Apps to improve productivity, maximize working capital, and enable faster cash conversion. Affordable, quick to deploy, and functionality-rich: it is pre-loaded with industry-specific best-practices and ready-to-plug with popular ERPs such as NetSuite and Sage Intacct. The HighRadius RadiusOne A/R Suite is designed to automate labor-intensive processes while streamlining credit and collections activities for faster A/R processing, better cash flow and improved profitability.

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