Collections
Definition
The process of pursuing payment on overdue invoices, from reminders and statements through payment plans to legal action or external agencies. Effective collections depend on accurate aging data and a consistent escalation policy.
Related Terms in Invoicing & Sales
Credit Memo
A document issued to reduce the amount a customer owes, used for returns, overcharges, agreed discounts or service failures. It can offset a future invoice or support a refund, and in VAT and GST systems it also adjusts the tax reported.
Remittance Advice
A note sent by a payer listing exactly which invoices a payment covers. Without it, part-payments and bulk transfers have to be allocated by guesswork, which is a common source of reconciliation delay.
Statement of Account
A periodic summary sent to a customer showing opening balance, invoices raised, payments and credits applied, and the closing balance owed. Unlike an invoice it is not a demand for a specific sum but a reconciliation tool.
Invoice
A document sent to a customer requesting payment for goods or services. Includes seller and buyer details, items, amounts, taxes, and payment terms. HelloBooks supports AI-powered smart invoicing with multi-channel delivery.
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