Accounts Receivable Collection Policy Template

ACCOUNTS RECEIVABLE COLLECTION POLICY TEMPLATE

This Accounts Receivable Collection Policy (the “Agreement”) is entered into as of [Effective Date] (the “Effective Date”) by and between [Company Name], a [State/Jurisdiction] [Entity Type] with its principal place of business at [Address] (“Creditor”), and [Customer Name], a [State/Jurisdiction] [Entity Type] with its principal place of business at [Address] (“Debtor”).

RECITALS

WHEREAS, Creditor provides goods and/or services to Debtor in the ordinary course of business; WHEREAS, the Parties desire to establish formal procedures, timelines, and obligations regarding the billing, collection, and resolution of outstanding receivables to ensure fiscal integrity and operational efficiency; NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree to the terms set forth below.

1. OPERATIONAL DEFINITIONS

1.1. “Account Balance” means the total sum of all invoiced amounts due from Debtor to Creditor, including principal, accrued interest, and authorized fees. 1.2. “Business Day” means any day other than a Saturday, Sunday, or federal holiday recognized in [Jurisdiction]. 1.3. “Due Date” means the date upon which payment is strictly required, as stated on the applicable Invoice, or [Number] days after the Invoice Date, whichever occurs first. 1.4. “Past Due” means any Account Balance that remains unpaid in full after the close of business on the Due Date. 1.5. “Default” means the failure of Debtor to perform any material obligation under this Agreement, including the failure to remit payment within the Cure Period.

2. SUBSTANTIVE TERMS & OBLIGATIONS

2.1. Invoicing Procedures: Creditor shall issue itemized Invoices for all goods or services rendered. Debtor shall raise any good-faith disputes regarding an Invoice in writing within [Number] days of receipt. Failure to dispute within this window constitutes an irrevocable waiver of the right to contest said Invoice. 2.2. Payment Terms: All payments shall be made in U.S. Dollars via [Wire Transfer/ACH/Check]. Payments are deemed received only upon cleared funds in Creditor’s designated account. 2.3. Late Fees and Interest: Any Past Due amount shall accrue interest at a rate of [Percentage]% per month, or the maximum rate permitted by [Jurisdiction] law, whichever is lower, calculated from the Due Date until the date of actual payment. 2.4. Reporting: Debtor shall provide, upon written request, such financial documentation as Creditor deems reasonably necessary to assess Debtor’s continued creditworthiness.

3. DEFAULT, TERMINATION, AND REMEDIES

3.1. Breach Classification: A Breach occurs if (a) Debtor fails to make any payment when due; or (b) Debtor breaches any other material term of this Agreement. 3.2. Cure Period: Upon the occurrence of a Breach, Creditor shall provide written notice of such Breach to Debtor. Debtor shall have thirty (30) Business Days from the date of such notice to cure the Breach. 3.3. Remedies: If the Breach remains uncured after the expiration of the Cure Period, Creditor may, at its sole discretion: (a) Suspend all pending deliveries or performance of services; (b) Accelerate the maturity of the entire Account Balance, making all future installments immediately due and payable; (c) Engage third-party collection agencies or legal counsel, the costs of which, including reasonable attorney’s fees, shall be borne by Debtor.

4. BOILERPLATE LEGAL PROVISIONS

4.1. Severability: If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect. 4.2. Entire Agreement: This document constitutes the entire agreement between the Parties and supersedes all prior discussions, representations, or agreements, whether oral or written. 4.3. Force Majeure: Neither Party shall be liable for failure to perform due to causes beyond its reasonable control, including acts of God, war, or governmental regulation, provided notice is given to the other Party within [Number] days of the event. 4.4. 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. 4.5. Dispute Resolution: Any dispute arising out of or relating to this Agreement that cannot be resolved through good-faith negotiation shall be submitted to binding arbitration in [City, State] under the rules of the American Arbitration Association.

5. FORMAL EXECUTION BLOCK

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

CREDITOR: [Company Name]

Signature: __________________________ Name: [Signatory Name] Title: [Signatory Title] Date: [Date]

DEBTOR: [Customer Name]

Signature: __________________________ Name: [Signatory Name] Title: [Signatory Title] Date: [Date]