Older Debt is Harder to Collect!


dollar_graph2Collection 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!