Why the age of the debt matters most
Debtors move, close, change banks, change their phone numbers, and run out of money. Other creditors get in line ahead of you. Documentation gets lost and memories fade. Every one of those things makes an account harder to collect, and all of them get worse with time.
Industry surveys put the chance of collecting a past-due account at roughly 7 in 10 after three months, about 1 in 2 after six, and a small fraction once it passes a year. The best window for placement is 60 to 90 days past due. Send accounts early.
Early action has one more benefit: it puts you first in line if the debtor ever becomes insolvent.
Signs the account is not going to pay on its own
- Two or more promised payment dates have come and gone.
- Calls and emails go unanswered, or the person you dealt with is no longer there.
- A dispute appears only after the invoice is past due, on goods or services that were accepted without complaint.
- Partial payments have stopped.
- A check was returned for insufficient funds.
- You hear the business has closed, moved, or changed its name.
Any one of these is a reason to stop waiting. Two or more is a reason to place the account this week.
What to do before you place the account
- Send one final written demand with a firm date.
- Confirm the balance is accurate and every credit and partial payment is applied.
- Gather what you have: invoices, statements, the signed contract or credit application, purchase orders, proof of delivery, and any emails or texts where the debtor acknowledged the debt.
- Stop extending credit to the customer.
You do not need all of the paperwork to start. Place the account with what you have and send the rest when you find it.
What happens once you place it
Collection starts immediately. The debtor is notified, then daily phone contact and written demands begin, with skip tracing when the debtor cannot be reached. Many accounts resolve in this first phase; at Accounts Receivable the average claim is collected in 14 to 21 days. If the account needs more, it moves to an attorney near the debtor without any extra step from you.
Two things we ask of every client: report any payment the debtor makes directly to you right away, because it is illegal for us to keep collecting on a paid claim, and stop all in-house collection activity on the account once it is placed. Mixed messages give a debtor an excuse to stall.
Common follow-up questions
Will sending a customer to collections end the relationship?
Usually not. We are firm but professional, and most of our clients keep the customer once the balance is resolved. Debtors are often more willing to work with a third party than with the original creditor.
Is 30 days past due too early to send an account to collections?
It is not too early to tighten your own follow-up. For placement, 60 to 90 days is the best window, but if the debtor has gone silent, bounced a check, or disputed an invoice they accepted, placing earlier is reasonable and costs nothing up front.
What if the debt is already more than a year old?
It can still be placed and worked, including through an attorney if needed. The odds are lower than they were at 90 days, which is a reason not to wait any longer.
Talk to us
Tell us about the accounts and we put together a free assessment, usually within one business day. Request a free consultation, contact us, or call 321-710-3530. Ready now? Place a claim and we go to work today. No recovery, no fee.