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How do I collect overdue accounts receivable?
How do I collect overdue accounts receivable?

Do you have debtors or overdue accounts receivable collections? Learn how to create a proposal that can help you manage these collections!

Pat Kuo avatar
Written by Pat Kuo
Updated over a week ago

There are a lot of reasons why a client might not pay for their invoices. 

Sometimes, they simply forget to pay an invoice. Other times, they might have some cashflow issues preventing them from paying their bills entirely. Or they might have an outstanding debt from a previous engagement or project that they were too deep in work to pay attention to.

Whatever the case may be, we want to help you eliminate your debtors by using Ignition! 

We'll show you how to collect for these outstanding debts by using Ignition and Ignition Payments so you can start being debtor-free, stop worrying about your accounts receivable and focus on your day-to-day work and business! 

Please note: This method uses Ignition Payments which every subscription has access to. Click here for a guide on how to set it up!
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​Alternatively, contact our Support Team to get some help with payment setup.

🚀 Using Xero or QuickBooks? Check out this guide on Collecting debt and invoice management when using Ignition and Xero/QuickBooks.

Setting up overdue services

The first thing we'll need to do is to jump into your Service Library and create a new service - Outstanding Payment.

  • Service Name = Outstanding payment

  • Service Description = This is your current outstanding payment that has yet to be paid since <DATE> for <PREVIOUS WORK/PROJECT>. We will need this to be paid in full before any work continues with your new engagement.

  • Price Type = $0 (we will change this to the specific amount within the specific proposal)

Once you have created the service, we can now communicate with the client and give them the option of whether they'd like to pay their outstanding debt in one payment, or in recurring instalments.
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When you have come to an agreement, we can create a proposal and send it to them.
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Creating a new proposal to collect overdue payments

Create a new proposal or navigate to the proposal creation screen.

  1. Name the proposal 'Debt Collection' or anything that you prefer.
    ​The Proposal Name is an internal field for your eyes only, so we suggest naming this differently for organisation purposes.
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  2. Add your Client and select the correct Contact details.
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  3. Set the proposals Start Date.
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    We suggest setting the start date a week from the current date to allow for some time for your client to accept the proposal.
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  4. In the Services tab, add the specific service that you agreed upon whether that was the singular payment or instalment plan.
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    If you agreed upon the singular payment, add the Outstanding Payment service and enter the accurate outstanding debt in the price field.
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    If you agreed to an instalment plan, add the Outstanding Payment (Instalments) service and adjust the billing rules to reflect the amount and number of repayment increments.
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  5. Next in the Presentation tab, you have the option of including a Personalised Message, or even a video. We suggest entering in a message similar to what you agreed upon in your earlier communications.
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    E.g.
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    ​Hi John,
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    ​Please see the proposal attached for your instalment plan to pay your outstanding debt of $2000 in $500 monthly instalments for 4 months.
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    ​Please let me know if you have any questions!
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  6. In the Send step, click Send via email to send this proposal directly to your client.

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