Accounts Receivable Collection Policy

ACCOUNTS RECEIVABLE COLLECTION POLICY

This Accounts Receivable Collection Policy (the "Agreement") is entered into as of this [Day] day of [Month], [Year] (the "Effective Date") by and between [Company Name], a [State/Jurisdiction] corporation with its principal place of business at [Address] ("Company"), and [Client/Customer Name], a [State/Jurisdiction] entity with its principal place of business at [Address] ("Client").

1. RECITALS

WHEREAS, the Company provides goods and/or services to the Client; WHEREAS, the parties desire to establish a formal protocol for the management, invoicing, and collection of Accounts Receivable to ensure timely liquidity and fiscal stability; NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

2. OPERATIONAL DEFINITIONS

1. "Account Receivable" refers to the legally enforceable claim for payment held by the Company for goods supplied or services rendered to the Client.
2. "Due Date" refers to the date specified on an invoice, or, in the absence of such specification, thirty (30) calendar days from the date of invoice issuance.
3. "Delinquent Account" refers to any Account Receivable remaining unpaid in whole or in part after the Due Date.
4. "Collection Costs" include, but are not limited to, reasonable attorney fees, court costs, collection agency commissions, and administrative expenses incurred in pursuing payment.
5. "Business Day" refers to any day other than a Saturday, Sunday, or a federal holiday in the [Jurisdiction].

3. SUBSTANTIVE TERMS AND OBLIGATIONS

1. Invoicing Procedures: Company shall issue invoices upon the delivery of goods or completion of services. Client shall review invoices within five (5) Business Days; failure to object in writing within said period constitutes acceptance of the invoice amount.
2. Payment Terms: All payments shall be made in [Currency] via wire transfer or electronic funds transfer to the account designated by the Company.
3. Late Fees: Any Delinquent Account shall accrue interest at a rate of [Percentage]% per month, or the maximum rate permitted by law, whichever is lower, calculated daily from the Due Date until paid in full.
4. Account Statements: The Company shall provide monthly statements to the Client. Client’s failure to dispute a statement within ten (10) Business Days of receipt shall be deemed an admission of the balance accuracy.
5. Representations: Client represents that it has the financial capacity to meet its obligations under this Agreement and that all payment instruments provided to the Company are authorized and valid.

4. DEFAULT, TERMINATION, AND REMEDIES

1. Events of Default: A default occurs if (a) Client fails to pay any amount by the Due Date; (b) Client becomes insolvent or files for bankruptcy; or (c) Client breaches any material term of this Agreement.
2. Notice and Cure: In the event of a payment default, Company shall provide written notice of breach. Client shall have thirty (30) Business Days from receipt of such notice to cure the default ("Cure Period").
3. Remedies: If the default is not cured within the Cure Period, Company may, at its discretion: (a) suspend further delivery of goods or services; (b) accelerate the balance of all outstanding invoices; and (c) pursue all available legal remedies, including litigation or submission to third-party collection agencies.
4. Recovery of Costs: In the event of legal action to recover Delinquent Accounts, the prevailing party shall be entitled to recover all Collection Costs from the non-prevailing party.

5. BOILERPLATE LEGAL PROVISIONS

1. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of [Jurisdiction], without regard to its conflict of law principles.
2. Dispute Resolution: Any controversy arising out of this Agreement shall be settled by binding arbitration administered by the [Arbitration Association] in [City, State], in accordance with its Commercial Arbitration Rules. Judgment on the award rendered may be entered in any court having jurisdiction thereof.
3. Entire Agreement: This document constitutes the entire agreement between the parties and supersedes all prior negotiations or understandings, written or oral.
4. Severability: If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue to be valid and enforceable.
5. Force Majeure: Neither party shall be liable for failure to perform due to causes beyond their reasonable control, including acts of God, war, or government regulation, provided the affected party provides prompt written notice.

6. FORMAL EXECUTION BLOCK

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

COMPANY: [Company Name]

By: ___________________________ Name: [Signatory Name] Title: [Title] Date: _________________________

CLIENT: [Client Name]

By: ___________________________ Name: [Signatory Name] Title: [Title] Date: _________________________