What is the least effective action for collecting overdue receivables?

Sending overdue accounts to collections and canceling customer credit immediately is the least effective action for collecting overdue receivables. This approach can severely damage the relationship with the customer and often leads to negative feelings about the business. It is typically a last resort and may not foster cooperation or willingness to pay.

In contrast, maintaining direct communication through phone or email can help resolve issues more amicably. Sending reminders via paper statements keeps the account front of mind for customers who may overlook their obligations. Meeting with customers allows for discussion and understanding of their financial situation, which can lead to a more effective resolution. These methods promote customer engagement and may lead to better outcomes in collecting overdue debts.