This article is relevant if you use NetSuite and seek better practices to notify customers about past-due invoices.
Background
In Accounts Receivable cash collection practices, the common sense orientation is to use reporting and notification tools to help the operation minimize the number of past due invoices. The most common techniques are the accounts receivable aging reports and the customer statement.
These reports and documents have their place. Readers may be interested in my 2017 article, Learn how to Send NetSuite Late Invoice Reminders, to help NetSuite produce enhanced versions of these conventional cash collection approaches.
However, there are ways to proactively observe customer payment behavior to warn us of future collection problems. 
Payment Sequencing Patterns
In most invoice and billing practices, the operation of distributing invoices follows a regular pattern. As a matter of course, our NetSuite Systems Integration practice sends invoices to our customers weekly as it follows our timesheet practices. Due to the weekly frequency of sending invoices, we have a regular cash receipts flow. With the pattern of distributing invoices and receiving cash, there is natural coordination between our firm’s accounts receivable function and our clients’ accounts payable process.
When we receive a customer payment and apply funds to respective open invoices, if we detect anything unusual, we use that as an opportunity to produce communications to our customers. Unexpected behavior is the early warning notification that we may experience future past due or late invoices.
Proactively Notify Customer of Payments Out of Sequence
Here are everyday cash receipt situations that represent unusual payment patterns:
- Out of Sequence: a cash payment is supplied for one or more invoices that are more recent than the oldest open invoice.
- Unidentified Invoices: a cash payment is offered, but we cannot determine how to apply the funds against open invoices.
- Partial Payments: we receive funds and identify the respective invoice, but the amount paid is not for the invoice total due.
The moment we see we have one of these situations, we have an opportunity to produce a customer communication to indicate we notice issues. Hence, we are coupling our cash receipt practices to our overdue cash collection practices to help minimize the overall late invoice payment situation to drive a desirable lower Days Sales Outstanding (DSO).
Readers may be interested in my related 2020 article, Calculate NetSuite Days Sales Outstanding (DSO) with Saved Search.
Click the image to see an example of the payment out-of-sequence notification email.
Out of Sequence Content Renderer Engine Profile
To better understand how we generate the content with NetSuite, we built a general-purpose Content Renderer Engine tool to expand the native built-in capacities to create rich HTML and PDF information. Below is a sample of the profile we crafted to link together saved searches that present a data universe which then a FreeMarker template can read and format a branded message.
I have written many articles about the tool; consider this article about how to Extend NetSuite Customer Statements.
Once we develop the right content, it simply is a matter of triggering the profile to distribute the content to the proper customer contacts to inform them of our concerns. Our concerns are likely their concerns to highlight the focus area of the message. Hence, we are coordinating. The content has URL links that allow the recipient to click to get the detailed invoices that may be missing from their accounts payable function.
Click the image to gain a better understanding of the profile definition. 
Get Access to Superior NetSuite Leadership
This article illustrates how we use our knowledge of business practices and the power of the NetSuite platform to produce better outcomes. Like all the algorithms and artifacts we have previously created, our tools are available to our clients without a license charge. In this case, we can start with a template and refine it for our client’s specific branding and messaging.
If you found this article relevant, feel free to sign up for notifications to new articles as I post them. Let’s have a conversation if you would like to activate the Payment Out of Sequence notification to drive better NetSuite-based collection practices.
See Related Articles
Marty Zigman
Holding all three official certifications, Marty is regarded as the top NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 30 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to set up a conversation.
More Posts - Website - Twitter - Facebook - LinkedIn - YouTube
