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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 your dedicated Customer Success Manager, Account Manager or reach out to our 24/7 Support Team here to get some help with payment setup.

Setting up overdue services

The first thing we'll need to do is to jump into your Service Library and create two new services - an On Acceptance service and a Recurring service.

On Acceptance service

  • Default Billing Type = On Acceptance

  • 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.

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

Recurring service

  • Default Billing Type = Recurring

  • Service Name = Outstanding payment (Instalments)

  • Service Description = This is your current outstanding payment that has yet to be paid since <DATE> for <PREVIOUS WORK/PROJECT>. We will need this proposal to be accepted before any work continues with your new engagement. Please note that this is a monthly/weekly instalment plan, being paid in increments of $X amount for X weeks/months.

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

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

Once you have created these services, we can now communicate with the client and give them the option of whether they'd like to pay their outstanding debt in one hit, 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 and End dates to however long you'd like to spread the instalments out for.
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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. Press the Stop Recurring Billing toggle. This ensures that your client will not be charged after the proposals End date.
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  5. If you are opting to send an instalment collection plan, select the Recurring Period for which you'd like to collect for, either Monthly or Weekly.
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  6. 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. Remember to save the service when you're done!
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    If you agreed to an instalment plan, add the Outstanding Payment (Instalments) service and edit the service description to reflect the amount and number of repayment increments.
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    Then, calculate the recurring price and enter it in the price field. We also suggest enabling pro-rata to ensure the full amount is paid, even if your client accepts the proposal after the Start date.
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    Remember to save the service when you're done!
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  7. Next in the Presentation tab, you have the option of including a Personalised Message, or even a video if you are on our Pro, Pro+ or Scale plan. 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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  8. Create the proposal and then click Actions → Send to client to send this off!

If you'd like to re-create this proposal for other clients that you need to collect overdue payments for, you can simply duplicate the proposal (Actions → Duplicate)!

Have any questions? Want help with setting up Ignition Payments? You can either contact your dedicated Customer Success Manager, Account Manager or you can reach out to our 24/7 Support Team at help@ignitionapp.com! 

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