There are a few key indicators of when you should place an account for collections. Commercial collection agencies can help to get your money back, but it is important to understand when and why to place an account with them. Here are some examples:
The account is 90 days or more past due.
Placing a customer in collections can be a very delicate and touchy subject, especially when the account is with a customer that you have had a long-standing relationship with. However, placing an account for commercial collections after it is 90 days past due is usually the best course of action to take. The older a receivable gets, the less likely it will be collected. It is important to place your account before it becomes uncollectible. According to Dun & Bradstreet, if an account is placed with an agency at 90 days past due, it has a 69% of being collected. Placed at 120 days that rate drops to 52%, and if placed after a year it drops to 23%.
The customer has a history of late payments.
If the customer has a history of late payments, then they will likely continue that pattern of behavior. Placing an account with a commercial collection agency can help to ensure that you receive payment in a timely manner and shows the customer that you are serious about getting paid. This can also help to avoid late payments in the future.
The account is not responding.
Past due invoices can put a real strain on your business. Not only do you have to worry about the lost revenue, but you also have to spend time and resources trying to track down the customer. This can be a frustrating and time-consuming process, especially if the customer is avoiding contact. If you have tried reaching out to the customer and they are not responding, then placing the account for collections is recommended.
They owe a significant amount.
If a customer owes your company a large amount of money, it is important to consider placing them for collections. When customers do not pay their bills, it can cause strain on your company’s cash flow and make it difficult to meet your own financial obligations. It is important to take action to ensure that your company’s bottom line is not affected.
When a business is owed money, it can be difficult to track down the customer and get them to pay. Commercial collection agencies are experts at getting businesses paid, and they will allow you to focus on servicing your other customers. In addition, most collection agencies work on a contingency basis, which means you will only pay if they are successful in collecting on the account. Placing an account for collections is usually a sound investment that can help you get the money you are owed.
Commercial Collectors Inc. (CCI) is NACM North Central’s preferred collection services provider. Having worked with NACM North Central members for many years, CCI has the knowledge and experience needed to provide efficient, effective, service-focused collections to reduce write-offs. To find out how CCI can help you, contact Larry Barthel at [email protected] or (763) 453-7408, or visit our website.
Recent Comments