Payment follow-up

The term payment follow-up covers all the actions involved in following up on one or more payments from a customer/debtor.

Payment follow-up is a function that belongs in the accounting department - and if the accounting department is divided, then in the accounts receivable department.

Basically, the more payments and customers a company has, the larger and more complex payment follow-up can be. In addition, factors such as recurring payments, installment plans and the like can also weigh down the function.

How does payment follow-up work?

The purpose of payment follow-up is to follow up on one or more payments from the company's customers.

If your company sends invoices on a regular basis, it's a good idea to follow up on payments daily. The bookkeeper should check the company's online banking to see if payment has been received.

If payment has been made correctly, the bookkeeper will post the payment in the company's ERPor accounting program.

If an invoice has not been paid correctly, it is typically the bookkeeper's job to ensure that the necessary actions are initiated. Often these actions are described and typically a friendly reminder or reminder letter will be sent with or without a reminder fee. These reminders can typically be created in the company's ERP or accounting program.

The bookkeeper must then follow up on the missing payments - and possibly consider what the next steps could be if the reminder letter is not paid either.

It will typically also be the bookkeeper's job to initiate a debt collection process - both if the company chooses to collect on its own or gets help from a debt collection company or a debt collection lawyer.

If a debt collection process has been initiated, either internally within the company or with an external debt collection partner, it will typically also be the accounting department that follows up on payments during the collection process - both for partial payments and full repayment of the amount.

Outsourcing all or part of payment follow-up

Payment follow-up is a classic bookkeeping function in accounts receivable, but more and more companies are choosing to explore the possibility of optimizing, automating and streamlining all or parts of their bookkeeping - including payment follow-up.

Today, there are a wide range of companies and services that help businesses outsource these functions - from invoicing to debt collection.

At Collectia, we offer invoice service, dunning service and debt collection, which are often used by accounting functions that want to have all or parts of their payment follow-up digitized or automated.