Unfortunately, there’s no one-size-fits-all answer about the right time for a business to use use a debt collection agency. From industry to industry and business to business, even from one account to the next, it all varies. Still, if you’re looking for general guidance, Business Professional Collection Services, Inc., here in Nevada, has a few suggestions about the right time to use a debt collection agency.
Your Own Office or Practice Policies
Your office may have its own policies that identify when a past-due consumer should be sent to collections. If so, follow that policy. Your accounts receivable processes have likely been established with that policy in mind, and it’s a good idea to reinforce. Plus, it likely ensures you’re sending off accounts within a reasonable timeframe.
If your office doesn’t have any kind of policy relating to collections, it’s a good idea to speak with an attorney about incorporating some language into any contracts or agreements you use with your clients, customers, or patients.
A Typical Rule of Thumb
Generally speaking, somewhere between 60 and 120 days past due is a good time to send a consumer to collections. That doesn’t mean older accounts can be sent, but recovery rates start dropping pretty significantly after 120 days in delinquency.
However, special cases do arise, and submitting an account isn’t always the best move. This comes back to your personal office or practice policy. Showing compassion can be a signal of an empathetic business, and that’s often pays off in its own way, so make note of how you’ll handle unique circumstances in your office policies. For instance, perhaps you’ll allow a 30 to 60-day extension if a situation warrants it.
Avoid Procrastinating
It’s easy to get focused on your day-to-day business, but follow-through is important. Often, businesses or practices are distracted or too busy to deal with overdue accounts. They may try to manage the situation themselves. If you’re serious about recouping your loss, contact an experienced and professional collection agency sooner rather than later. In northern Nevada, BP Collect is happy to answer all of your questions. Contact us today to learn more about how we can maximize your return.
