Setting Your Debt Collection Timeline to Maximize Results

Time is the most critical factor in any debt collection. It is more important than the quality of the customer, the qualifications they may have had when you issued them credit, or any promises they might make about catching up on their payments.

Every minute that goes by that you aren’t pursuing some type of collection effort makes it more and more likely that you will never recover what you are owed. And since time is everything, having a debt collection timeline planned out in advance is the absolute best way to maximize the results of your collection efforts.

Starting Your Timeline Immediately

As someone who is in charge of handling the accounts receivable for your company, you probably have dozens of different things that have to be dealt with on a daily basis. That is exactly why it can be so easy to put off initiating the debt collection. There is nothing fun or exciting about debt collection, and while it is important, it never really feels all that urgent.

However, every day that you put off pursuing an outstanding debt dramatically reduces the chances of ever collecting that debt. So while starting your collection process might not seem like the most urgent task on your desk, avoiding it could prove to be more expensive than many of the matters that feel more pressing at the moment.

Why You Should Have a Firm Timeline

The best way to make sure that you maximize your debt collection efforts is to have a debt collection schedule in place before you ever need one. You should have a written plan of exactly when you will execute which steps in the plan so that you don’t have to think about it and you can’t fall into the trap of giving your debtors a few more days of good faith.

The best time for starting your debt collection process is the exact day that an account falls into late status. This is a clear red flag that there is some type of problem with the customer, and the sooner you get in contact with them, the more likely they will be to work with you on finding a solution.

Planning Additional Collection Steps

Following the initial contact, your collection plan should call for additional measures at specific time periods. This might include something like mailing a late notice in addition to contacting them on the day that an account falls into delinquent status. It could also include scheduled follow-up phone calls and letters every so many days until some type of resolution is reached.

When to Call in the Experts

The more you deal with collections, the more likely it becomes that you will eventually encounter a debtor who isn’t interested in working with you towards a mutually beneficial solution. At this point, you have no choice but to call in the experts, but you could also do so well before the situation reaches a point of desperation.

When exactly you choose to turn over a delinquent account to a commercial debt collection company is a matter of personal preference. But it is critically important that you have some plan in place to deal with your worst cases, and that plan should be in writing so that you never have to second guess yourself in the moment.

Debt collection can be an incredible tricky business. In order to make sure that you put yourself and your company in the best position to maximize results on any effort your put forth, make sure that you have a plan in place to handle your outstanding accounts from the minute they fall into late status.

By |2017-07-27T10:42:26+00:00July 27th, 2017|Blog|0 Comments

About the Author:

Graduated from University of Utah - business degree 1990. Served in US Army as an interrogator / linguist, then as a tactical intelligence officer - Military Intelligence 1986-1990. Managed Western US sales operations for NY based collection agency 1990-1992. Founded Direct Recovery Associates, Inc. 1992-present