Cash that customers owe you is the cheapest financing a business has, and it is the easiest to lose through inattention. Collections rarely fail because of one difficult customer. They fail because unapplied cash sits unresolved, disputes wait for someone in sales to respond, and nobody works the ageing report on the same day every week. This free accounts receivable checklist gives credit controllers, AR teams and finance managers a weekly collections cycle and a month-end review. The weekly cycle applies cash, works the ageing report bucket by bucket, logs every customer contact and routes disputes to the people who can fix them. An escalation phase appears only when an account passes your overdue threshold. At month end, the checklist reconciles the ledger, reviews the bad debt provision and puts every write-off through an approval.
Accounts receivable sits between billing and cash. Billing raises the invoice; AR makes sure it is paid, applied to the right customer account and, when it can’t be collected, provided for and written off properly. It is the mirror image of accounts payable, and it needs the same discipline pointed in the other direction.
The most effective AR teams split the work in two. A weekly cycle keeps the ledger clean and the collection calls going. A month-end review deals with the accounting: reconciling the subledger, updating the provision for doubtful debts and approving any write-offs. Running both from the same checklist means the month-end review can see exactly what was done to collect each balance before it was written off.
Covers: cash application, the ageing report, customer contact by bucket, promises to pay and disputes.
Cadence: the same day every week.
Output: a clean ledger, a contact log and a shorter list of overdue accounts.
Covers: subledger reconciliation, the bad debt provision, write-off approvals and KPIs such as DSO.
Cadence: monthly, as part of the close.
Output: a reconciled balance, an approved provision and a collections forecast for the cash flow model.
Four weekly phases keep cash applied and customers contacted. Phase 5 appears only when an account passes your escalation threshold, and Phase 6 is the month-end review.
An overdue report built on unapplied cash chases customers who have already paid. Clean the ledger before anyone picks up the phone.
Shown only when an account is more than 60 days past due. Change the threshold to suit your terms and customers.
Shown in the last collections cycle of each month. Assign it to the finance manager or controller.
The matrix sets out who does what at each stage of overdue. Agree it with sales before you use it, so account managers know when they will be asked to step in and when an account will go on hold. The day counts assume 30-day terms. Tighten them for customers with a poor payment record, and loosen them where a large customer’s approval cycle is slow but reliable.
| Days past due | Action | Owner | Escalate if |
|---|---|---|---|
| Not yet due | Pre-due reminder on large invoices; confirm the invoice is approved for payment | Credit controller | The customer says they haven’t received it |
| 1–15 | Reminder email with the invoice attached | Credit controller | No reply within five working days |
| 16–30 | Phone call to the customer’s AP team; agree a payment date | Credit controller | No payment date given, or a promise broken |
| 31–60 | Statement, second call, account manager involved | Credit controller and account manager | A dispute is raised, or no response |
| 61–90 | Credit hold, formal demand, payment plan if appropriate | Finance manager | A payment plan is missed |
| Over 90 | Agency or legal referral decision; provision reviewed | Finance manager or controller | Write-off is proposed |
Late-payment interest depends on where you and your customer are. In the UK, the Late Payment of Commercial Debts (Interest) Act 1998 lets a business charge statutory interest on overdue business-to-business debts at 8% above the Bank of England base rate, plus fixed compensation of £40, £70 or £100 depending on the size of the debt. A Commercial Payments Bill now before Parliament would cap most payment terms at 60 days and make that interest mandatory, but it is not yet law. In the EU, the Late Payment Directive (2011/7/EU) sets a minimum rate of 8 percentage points above the European Central Bank reference rate and fixed compensation of at least €40, implemented through each member state’s law. A 2023 proposal to replace it with a stricter regulation has stalled, so the Directive still applies. In the US, late fees and interest generally depend on your contract terms and state law, including state usury limits. Consumer debts are treated differently everywhere: in the US, for example, third-party collectors of consumer debt are covered by the Fair Debt Collection Practices Act. Put your late-payment terms in the contract and on the invoice, and take advice before relying on them.
Provisions differ by framework, too. IFRS 9 requires a lifetime expected credit loss allowance for most trade receivables (the simplified approach), and a provision matrix by ageing bucket is a common way to calculate it. US GAAP applies the current expected credit loss (CECL) model in ASC 326, and ASU 2025-05, effective for annual periods beginning after 15 December 2025, lets entities assume that conditions at the balance sheet date stay unchanged over the short life of current receivables. UK FRS 102 uses an incurred-loss approach, where you provide when there is objective evidence that a debt is impaired, unless the company has chosen to apply IFRS 9 instead. The ageing data this checklist produces each week is the starting point for all three.
A recurring weekly schedule creates the collections checklist and assigns cash application, the ageing review and customer contacts to the right people. When a week is missed, it shows as overdue on the dashboard instead of turning up as a jump in DSO at month end.
Credit holds, payment plans, agency referrals, credit notes and write-offs are approval steps, so nobody can put an account on hold or clear a balance on their own authority. Each decision records who approved it and when.
Every call, promise to pay and dispute is logged against the week it happened. When an account reaches the write-off stage, the finance manager, the auditors and, if it comes to it, a collection agency can see exactly what was done to collect it.
Collections is a weekly routine, not a project. CheckFlow’s recurring checklist software runs it on a fixed day, with a separate checklist per entity or per customer portfolio if your credit control team splits accounts between them.
AR is the receiving end of the cash cycle. The Accounts Payable Process Checklist covers the paying side, the Invoice Approval Workflow Checklist covers how your own suppliers’ invoices are approved, and the Weekly Cash Flow Forecast Checklist turns this week’s collections into next week’s cash position.
A weekly cycle and a month-end review. The weekly cycle covers applying cash, reviewing the ageing report, contacting customers according to how overdue they are, logging promises to pay and resolving disputes. The month-end review covers reconciling the AR subledger to the general ledger, reviewing the bad debt provision, approving write-offs and reporting DSO. Add an escalation step for seriously overdue accounts, with approvals for credit holds and referrals.
Weekly, on a fixed day. A monthly review is too slow: an invoice can move from current to 60 days overdue between two month-end reviews without anyone contacting the customer. A weekly review also catches unapplied cash and credit balances while the customer still remembers the payment.
Set the trigger in advance, not case by case. Many businesses on 30-day terms involve the account manager at around 30 days overdue, and consider a credit hold and formal demand at around 60. The matrix above is a starting point. The important thing is that the escalation happens because a threshold was reached, not because someone finally noticed.
Often, but the rules depend on the jurisdiction and on your contract. The UK and EU have statutory late-payment interest and fixed compensation for business-to-business debts. In the US, interest and late fees usually depend on the contract and on state law. Consumer debts are regulated more tightly everywhere. State your terms in the contract and on the invoice, and take advice before claiming interest you haven’t agreed in writing.
When the collection history shows it is uncollectable: the customer has gone into insolvency, the debt has been through your full escalation process without success, or the cost of pursuing it exceeds what you would recover. The write-off should be approved under your authority matrix. Separately, your accounting framework sets how you provide for expected or incurred losses before that point, and tax rules set when you can claim VAT or sales tax relief on the debt.
Accounts payable is money you owe: receiving supplier invoices, matching them, approving and paying them. Accounts receivable is money owed to you: applying customer payments, chasing overdue invoices, resolving disputes and writing off what can’t be collected. They share a ledger discipline but involve different people, risks and approvals, so CheckFlow keeps them as separate templates.
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