When it comes to recovering overdue payments, one technique stands alone as the most effective debt collection practice – early account submission.
Businesses work hard to get and keep clients. They don’t want to damage that relationship by sending them to collections. This is why many businesses try to handle the outstanding debt in house, spending more time and money calling and writing (or just waiting and hoping the client will pay on their own), throwing good money after bad. Unfortunately, this is how a slightly overdue payment turns into a big issue.
Take Action Early to Improve Profit Recovery
Accounts receivable depreciation is the silent destroyer of many a profit margin. It’s well known in the collections industry (and unfortunately not as well known in the businesses they serve), that the older a debt, the less likely it is to be collected. By the time a debt is 6 months old – the very time many business owners will finally consider sending it to an agency – there is a 30% or less chance of successful collection by any means. Debts that are more than a year old have only about a 10% chance of collection! But debts that are only 30-60 days old have a 90+% chance of being successfully collected.
Best Debt Collection Practice: Early Submission
As you can tell from the numbers we mentioned, the key to successful debt recovery is tightening and shortening the process. Yet many business owners will still hesitate. They don’t want to offend their client, and don’t want to pay a high percentage of the debt to an agency. Those are very good reasons, and they’re the exact reasons the difference makers at Optio Solutions created Talking Statements® — inexpensive and gentle reminders that won’t offend your clients, but will get results. We’ll treat your clients right — we know how hard you’ve worked to create those relationships, and we want you to keep them! Traditional collections methods are always available as a last resort, but your last resort shouldn’t be your best debt collection practice, nor should it be the first action you take.
Improving your accounts receivable collections percentages is just smart business. Ready to take control? Contact Optio Solutions today – we’d like to show you the difference we can make in your business.
