A collections process that works for Philippine B2B companies

A good collections process gets customers to pay on time without damaging relationships. In the Philippines, where B2B payment often depends on counter receipts, scheduled check releases and personal relationships with customers' accounting staff, collections is part process, part relationship management. The process below gives each overdue peso an owner and a next step.

Principles

• Start before the due date. Most late payments come from invoices the customer has not processed.
• Segment customers. Key accounts, regular accounts and high-risk accounts need different approaches.
• One owner per account. Usually a collector, with the sales account manager involved for escalations.
• Record every contact and every promise to pay.
• Escalate on a schedule, not on mood.

Collection calendar by stage

Counter receipts and check pickup schedules

Many corporate customers process invoices only after issuing a counter receipt, and release checks on fixed days (for example every Friday). Your collectors should:

• Secure counter receipts promptly and record the promised payment date
• Know each customer's check release day and send pickup or deposit instructions in advance
• Encourage bank transfer to reduce pickup costs and delays

Handling disputes

Disputes delay payment more than unwillingness to pay. Common causes are price differences, short deliveries, damaged goods and missing documents. Log disputes separately from overdue accounts, assign them to sales or operations for resolution, and issue credit memos promptly when warranted, with approval.

Credit holds

Credit holds are the strongest lever. Define rules, such as blocking new orders when a customer exceeds its limit or has balances over 60 days, with override authority for management. Holds work only when sales order entry checks credit status automatically.

Payment plans

For customers in temporary difficulty, a documented payment plan with post-dated checks and a clear schedule is better than open-ended promises. Monitor adherence weekly and stop further credit if a plan is broken.

Collector KPIs

• Collection effectiveness index (share of collectible amount collected)
• Overdue percentage of their portfolio
• Promises kept rate
• Average days to resolve disputes
• Calls or contacts per day as an activity measure, not a goal by itself

Tools that help

Collections improve when collectors work from a live list: aging by customer, invoice details, counter receipt status, PDCs on hand and contact history, all in one place. Statements of account should generate automatically. Read how to use an AR aging report and post-dated checks management.

Cirquolus Customer aging & collections supports aging inquiries, classification aging, statements of account and invoice and payment context for collection follow-up. Accounts receivable handles counter receipts, payment entries and post-dated checks, and CRM keeps customer conversations with an owner and next step.

Frequently asked questions

What is the collection process in accounts receivable?

The steps a company takes to collect payment: invoice confirmation, reminders, follow-up calls, escalation, credit holds, payment plans and, as a last resort, legal action.

When should collection start?

Before the due date, by confirming invoice receipt and the customer's payment schedule.

How do you collect from customers who keep delaying?

Escalate on a fixed schedule, involve the sales account owner, apply credit holds and agree a written payment plan with post-dated checks.

Should sales or finance handle collections?

Finance usually owns the process, with sales accountable for its customers' payment behavior and involved in escalations.