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Older Debt is Harder to Collect!
Collection Managers have long realized that the longer a delinquent account ages, the less likely it will be collected.
The Commercial Collection Agency Association of the Commercial Law League of America recently polled its members--a consortium of America's leading collection agencies. The consensus of the members who represent a cross section of industry, was that the probability of collecting a delinquent account drops dramatically with the length of delinquency.
According to the survey the likelihood of recovering a current balance was over 94%. Conversely, if the balance remains outstanding for 90 days, the likelihood that the debtor will remit payment is just under 74%.
Why are older balances harder to collect? Some of the reasons include:
- Debtor files bankruptcy
- Debtor skips
- Relocation
- Proof of delivery is unavailable
- Misplaced records
- Those familiar with transaction are no longer available
- Department turnover
The message is clear. Don't procrastinate, time is your enemy. Protect your accounts receivable. Time is money!
