A Note Of Caution About Monthly Statements
By Michael C. Dennis, MBA, CBF

A monthly statement is summary of all outstanding invoices, debits, chargebacks, credits, and on account payments. It is intended as a "friendly reminder" to customers about overdue invoices. Unfortunately, some customers will deliberately ignore the due dates listed on their creditors' invoices, and will only pay when their monthly statement arrives showing invoices as past due. Credit professionals must strongly discourage this practice in order to protect their company's cash flow.

Insist that your customers pay invoices as they come due, rather than on receipt of monthly statements. As a last resort, if a large and important customer insists on paying only against account statements, generating statements weekly or even daily to that customer - even if the process cannot be automated if you want to eliminate the customer's excuse for withholding payment.

Always include this key information on your monthly statements:

• Your remittance address

• Your invoice number

• The customer's purchase order number

• The invoice date

• The discount due date

• The net due date

• Your telephone number

• An invitation for the customer to call to report problems or request supporting documentation

• Your company's terms of sale