Purpose and Scope

This Collections Policy is designed to provide standard procedural guidelines to Sales, Leadership, and the Finance Group, consistent with Sourcegraph’s culture, brand and customer service standards and best practices, with the following goals:

1. Reduce as close to zero as possible, conditions where invoices are uncollectible
2. Provide proper stewardship of Sourcegraph’s assets by minimizing the average number of days that invoices go unpaid.
3. Create the circumstances for predictable cash flow
4. Meet industry and trade partner (like banks) expectations for upper quartile AR collections performance

The effectiveness of this policy relies upon timeliness of execution and where required, creating Collections Action Plans that are specific to each collection circumstance. Time is of the essence in the effectiveness of this policy.

Definitions:

Accounts Receivable: the funds that customers owe your company for products or services that have been invoiced

Responsibilities:

• Controller: Accountable for the Collections Policy including any policy modifications
• Senior Accountant: Will administer the policy with support from the Deal Desk Manager and individual sales team members and leaders as outlined in this policy
• Account Executives: Throughout the customer contract, Account Executives are responsible for communicating to the Deal Desk and Accounting Teams, any contract information such as:
  • Customer use of any 3rd party supplier management platforms for invoice submission, (such as Ariba, Coupa, Etc)
  • PO number if required by the customer If a customer requires a PO, an invoice cannot be issued until it has been obtained
  • Completion of any new vendor set-up requirements. The information and documents usually required by customers can be found in the Sales Resources handbook page. Any documentation required that cannot be found on the Sales Resources Handbook page, should be requested within the #deal-desk Slack channel.
  • Any changes in contact information. If this is a new customer we must have the customer’s AP email address/Contact
  • Sharing any verbal communication with the customer regarding AR as applicable. Account Executives will be accountable for proactively addressing A/R issues once assigned and based on the class outlined in the CCM, and regularly communicating with the Deal Desk and Accounting Team on efforts made.
• Customer Engineer - In the case that a customer engineer has more rapport with our customer than the AE, the CE on the account should be enlisted to assist in collections efforts with their own contacts

Context

As Sourcegraph is expected to deliver its services timely and completely, our customers are expected to timely pay our invoices per the terms outlined in the signed order form . When a Customer has not paid according to the agreed upon terms or within reasonable expectations for prompt payment, this process documents the appropriate steps to collect payment from the client.

In general, our Customer contracts regarding payment fall in the standard Net30 terms (from Order form Execution Date) as outlined in our online “Terms.” Any exception outside of the standard Net30, Net45, or Net60 payment terms, will need to be approved by the Controller or Senior Staff Accountant and will need to be specifically called out in the signed customer order form

A significant portion of the collection effort is usually an effort to understand and document why an invoice has not been paid timely. A successful collection strategy is predicated on several important factors, including:

1. Pursuit of normal contract terms at the outset (i.e., not accepting a greater than 30-day payment term).
2. Prompt action on delinquent invoices, within days not weeks. It is important that the appropriate follow-up and escalation measures are taken as outlined in the Collection Class Matrix and that it is understood that as every day an invoice gets older, the chances of collection are reduced