Timing is Everything

Timing is Everything.

This months blog will cover the importance of account placement, and the age of the account when it is placed for collections. Last months blog spoke about the value of your receivable and how they diminish quickly over time. The illustration below shows that once an account is over 90 days past due, that it is only 15 to 50% collectable.

Decrease in Value as Receivables Age



< 30 days


30-59 days


60-89 days


90-120 days


That is substantially lower than the 60 to 89 day time frame (60-75%). We suggest that if your customer has not paid or made a solid arrangement within the first 60 days, that you place the account for collections. You will see much better results, and will reduce your loses to bad debt significantly. If you have credit policies in place, you will not see any increase in costs associated with having a third party handle the accounts, as your past due customers will be responsible for paying the collection fee. See our blog on Increase your net return from collections for more information on adding collection fees.

If you are unable to reach your customer because your contact information is not current, or the customer has moved and left no forward, you should place that account immediately or begin your own skiptracing efforts. At this point the age of the account is irrelevant. The quicker you place the account, the better chance we will have in locating the customer before they disappear completely. For information and resources to handle in-house skiptracing efforts, visit our blog on  Skip Tracing techniques and resources.

 We understand that in some industries (medical and dental) it is difficult to place the accounts that early as there may be insurance that should pay. In these cases, you should start the clock as soon as you receive the insurance payment. So once the account is 60 days past the time frame in which the insurance paid, you should look at placing the account for collections. This timing is very important to reducing your loses to bad debt.


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