What you should do to get paid faster and reduce bad debt
January 17th, 2016 by New World Collections
No business owner likes to hear the word delinquent account. At some point, that means
you may have to place those accounts with a debt collection agency. So what can you as a business owner do to minimize accounts from going to bad debt and over to a collection agency?
It first starts with knowing that when delinquent accounts become 90 to 120 days past due, only 15-50% of that money is collectable. However, there are a few tips you can utilize in that first 90 days to recover more money and minimize bad debt.
1) Consistently send invoices every 30 days
2) Utilize red stickers or stampers with notice of PAST DUE on invoices
that age 31-60 days delinquent.
3) At 61 to 90 days delinquent, send a customized letter or notice on your invoice
that advises your customer of their past due account and a request to
contact your office for payment arrangements. Further advise that if their balance
reaches over 90 days delinquent, it will be forwarded to a debt collection agency.
There is nothing fun about delinquent accounts nor having to refer them to a debt collection agency. However, you can get a better handle on your accounts receivables by sending consistent reminders and strategic communication methods within the first 90 days. Doing so is well worth reducing the amount of debt and hassle of sending more to a collection agency.
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