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Collecting

Members of the ISP-Webhosting list discuss an eternal problem: collecting on overdue accounts.

[September 8, 2000]

On the ISP-Webhosting list in August, MK asked,

"How do you guys handle past due accounts?"

MYP offered the following example:

"We send the first notice after 7 days past due. Then the account is disabled after 15 days; and then after 30 days, the serious mail notice comes. After 60 days, the account is terminated. And we assess finance charges. Here are the two notices we send:

FIRST NOTICE:

***PAST DUE NOTICE***

Just a friendly reminder. Our records indicate you have an outstanding balance due on your Account. Please send payment in the amount attached. Or please give us a call with your Master Card or Visa number. The account may be disabled if payment is not received. If you have already sent payment, please disregard this notice. Thank you for your attention.

Past Due Amount: $0.00

Regards,
Billing

 

SECOND NOTICE:

***PAST DUE NOTICE*** (Final Notice)

Your Account is seriously past due. Our records indicate you still have an outstanding balance of $0.00 due on your Account. Please send payment in the amount attached. The account has been canceled either at your request or by our billing system. To re-enable the account please call with a credit card or send payment. If you have already sent payment, please disregard this notice. Note: your account may be subject to late fees, a reconnection fee, and finance charges. Your account may also be turned over to a collection agency.

Amount Owed: $0.00 Please Remit Immediately.

Regards,
Billing

 

EL offered an alternative method of staying on top of things:

"Better yet, do not extend credit to your customers. Simply charge their credit card or debit their checking account every month. Your past due invoices drop to zero or thereabouts, and you get all of your money on the same day every month: gotta love it!"

[MVP disagreed] "If someone doesn't have the money to pay on time via an invoice, they won't have any credit on their credit cards. We typically bill the credit card on file if they don't pay their invoice-this for customers that are NOT set up for credit card billing. What we find is that most people who do not pay on time also don't have any credit on their credit cards."

—End