All businesses rely on their clients/customers to honor their debts and pay their bills in a timely fashion. Most businesses allow their clients/customers thirty days, sixty days or sometimes even ninety days to pay invoices. If clients/customers do not pay outstanding invoices on time businesses make several attempts to get past due amounts paid by making phone calls, sending emails and/or sending demand letters via regular mail. If these efforts do not result in getting past due amounts paid, how long should you wait before engaging a third a third party collection firm to help with the debt collection process.
While there really are no concrete guidelines to use to determine how soon you should start the external debt collection process, at TCLG we recommend looking at the communication or lack thereof between the debtor and creditor to determine the proper time to get a third party involved. As we all know in commercial collections timing is critical to the collection process as the likelihood of a successful collection goes down exponentially every month a past due amount remain outstanding. Companies are here today and gone tomorrow. So at TCLG we recommend looking at the communication or lack thereof between the debtor and the creditor to determine if it is time to get a third party involved. At TCLG our philosophy is to keep the collection process in-house if the “debtor is communicating with the creditor in a meaningful way” regardless of how many days the outstanding amount are past due. And the flip side of that is the matter should be sent to a third party collection firm immediately regardless of the timing of the past due amount as soon as the “debtor stops communicating with the creditor in a meaningful way”
Tip: Keep past due accounts in-house if the “debtor is communicating with the creditor in a meaningful way” regardless of how many days the outstanding amount is past due. And send the matter to a third party collection firm immediately regardless of the timing of the past due amount as soon as the “debtor stops communicating with the creditor in a meaningful way”.