When should I place a delinquent commercial account for collection?
In our last blog, we talked about the 10 signs that a delinquent account should be sent to the services of a commercial debt collection agency such as Ross, Stuart & Dawson. After all, while you're able to track down many past-due payments on your own, it's also true that many require a professional's help.
One very key element we should fully address is timing: The age of a delinquent account is one of the biggest factors in determining whether or not a debt gets paid.
The older the debt, the harder it is to collect. Remember the general rule about the amounts you will collect:
- After three months the probability is that you will only collect $0.73 of each dollar delinquent.
- After six months, you'll collect only about $0.54 of every dollar.
- After one year, the best expectation is that only about $0.26 of every delinquent dollar will be collected.
While something is of course better than nothing, it's not enough to cover your expenses! The best time to enlist the services of a commercial debt collection agency is 60-90 days of the invoice due date. Incorporating this strategy will help ensure maximum recoveries with the least cost to your company.