Jul 7, 2020·8 min read

An accountant's guide to avoiding collections in the time of Coronavirus (for you and your clients)

It's a difficult time for cashflow but that doesn't mean collections should be the first step.

by Matt DarnerVP, Business Dev. | Co-founder

Unfortunately, as a financial professional, you know what’s coming next for your clients: as everyone struggles in this new economic reality, some of your unpaid invoices - both yours, and your clients’ - are going to stay unpaid.

So what happens next? Is there a way to somehow keep collecting payments right now without sending half of your clients to collections?

Thankfully, the answer is ‘yes’.

No business can completely avoid the problem of unpaid invoices. But did you know that there are simple communication strategies to effectively minimize invoices being unpaid, even now?

It may sound strange to get advice about avoiding collections from a company that specializes in collections, but we’ve seen what works to avoid this process and we genuinely want to be a part of the solution of protecting cash flow for your business and your clients.

So here’s our top tips - and a few free tools - to help you and your clients avoid the collections process and protect cash flow at every stage, even now in the time of coronavirus.

(P.S. While this article is written directly to financial professionals, you can also use these tips to help advise your clients or for your own small business to improve payments and collection processes)

For New Clients: Communicate Payment Expectations From the Start 

Did you know that protecting your business’ cash flow, and avoiding collections, starts before a new client even signs a contract?

Communication about payment expectations is vital at every stage - and that communication starts during the pre-sale process, and should be clearly written into your engagement letter.

In your engagement letter, you should have:

  • The payment schedule of the project

  • What happens when payments are late or missed

  • The consequences of late payments, including details about when work will be stopped and what their late fees and/or interest will be

  • And at what point you will turn over a client’s unpaid account to collections

This will protect you from unmet expectations and disappointments later on down the road, which are often to blame when it comes to unpaid invoices.

So if you’re signing on new clients right now, make sure that they have a very clear understanding directly from you - and in the language inside their contract - of your payment expectations and collections process.

TIP: Looking for help in finding good language that will protect you if you have to send an account to collections? Check out our blog on that topic here for some example language you can include in your engagement letter that could save you thousands. 

For Current Clients in Good Standing: Reach out and Make a New Plan Together If Needed

Again, communication is key here - you’d be surprised how far it goes to simply pick up the phone or send an email.

Everything has changed, and no one knows what the new “rules” are, so make sure to personally reach out and readjust expectations explicitly with your clients. The details of those expectations will, of course, depend on their industry: for example, clients in the restaurant or travel industry will need a lot more help and grace than others. Try to be as human and gracious as possible.

BUT - make sure you ask for what you need, too, without fear of guilt or greed. We are all in this together, everyone is trying to stay afloat and keep the lights on, and you still deserve payment for your services, too. So work together with your clients to create a new plan that works for both of you right now.

Here are some suggestions:

  • Work out a payment plan to pay for current balances due (because hey, a little money coming in slowly is better than none at all)

  • Decide together if you want to reduce or pause recurring services at this time, and set a date when you’ll follow-up and reevaluate

  • Readjust the timeline and expectations for when you’ll need to start charging interest

    and/or pursue collections on unpaid invoices

  • Incentivize early or timely payments by offering small discounts

And - bonus - if you create this plan together with your client, they’ll be more likely to adhere to it and pay it.

TIP: Are you worried about staying on top of yours, and your many clients’, long list of aging unpaid invoices? We can help! When you sign up for a free CollBox account, lots of free tools, reports and a special dashboard view are included to help you track all those different A/R numbers in one place. And all of it seamlessly plugs into your preferred financial software! Click here to learn more and sign up for free.

To stay on top of the aging of your unpaid invoices, we’ve got a free tool for that - when you sign up for a free CollBox account. 

For Clients That Were Already Delinquent Before the Coronavirus: Proceed as Usual With a Little Extra Grace

This is for those clients whose lack of payment predated the coronavirus outbreak - therefore, you can pursue past-due reminders and collections with them at a more traditional pace.

However, you should still reach out to them about their current situation.

… If they pick up the phone, that is. At this point, some of your past-due clients may start dodging your calls or not responding to your email reminders. If that’s the case, try the following:

  • Make sure you use a platform or service that helps you track if your emails and messages have been opened, not just delivered

  • Try a different form of communication, like text instead of email

  • Contact a different person in the company, especially someone higher up the food chain,

    if that’s an option

  • Remind them of the consequences (interest charges, penalties, etc) that they agreed to

    in their contract

  • You can also try to incentivize them by extending their grace period slightly, and offering

    to waive penalty or interest fees if they pay before a certain date

And - just a quick reminder in case you haven’t done it already - make sure you understand WHY their invoice is past-due. Lack of payment is often a result of poor communication or unmet expectations from earlier in the invoicing process; if you’re lucky, you may be able to quickly make a correction and receive payment.

TIP: You can get more information about this pre-collections process in our free toolkit, “The Ultimate AR Workflow Checklist” - we’ve got a free checklist you can download to guide you through the communication strategy point by point, from 0 to 90 days past-due. Again, please feel free to share this information with your clients as well, and help educate them on this process for their clients, too.

Bonus Tip: Don’t Just Play Defense - Get Creative and Diversify Your Cash Flow Right Now

These are, of course, all preventative and defensive measures to protect the payments you’ve already earned. But what about protecting your cash flow by increasing it with new work?

We’ve seen many financial professionals adapt amazingly and spring into action in many timely and clever ways to fill new business and financial needs.

Here’s some of the examples we’ve seen from other financial professionals right now, which you can mimic in your own business to help increase and diversify your current income:

  • After a crash-course of online learning, offer your services to help businesses with SBA loan preparation and application (because a business cannot apply for a loan until their books and financial records are up to date)

  • Create downloadable budgeting checklists or expenses management tips

  • Host webinars or workshops on these same topics

We’re sure that you can get creative and think of even more ideas. You don’t have to put all your energy into defensively saving money from collections - do what you can to earn more money, too, by finding new solutions to new problems, and therefore increasing your business’ cash flow. 


Communication is the best tool you have when it comes to reducing the amount of clients and invoices you send to collections, even in times like now when everything feels so uncertain.

Because of that, you (and your clients with their clients) should develop a communication strategy for every point of your client process (or just borrow our strategies by downloading our free tool kit, “The Ultimate AR Workflow Checklist”.

But remember, you don’t have to just play defense right now - try to be proactive and decrease your A/R balance by adapting creatively and providing for the new financial needs that businesses have right now in a world with the coronavirus.

And again, we really don’t want any of your invoices to end up in collections, but if and when it gets to that point, we’ve always got your back here at CollBox. Just reach out to us at info@collbox.co, and we’ll help you through the process, from final communications to finding a good collection agency and beyond.

(And if you're afraid of the cost, don't be - we don't get paid unless you get paid!) 

For more resources and information about how to help your business, and your clients' businesses, be sure to visit the U.S. Chamber of Commerce: Coronavirus Small Business Survival Guide and the U.S. Small Business Administration's Coronavirus (COVID-19): Small Business Guidance & Loan Resources.

Share this post:

Start collecting on your past-due invoices today

From gentle follow-up to collections, CollBox is the simple A/R solution for businesses with slow and non-paying customers.