When is the right time to send an account to a debt collector?

This is an extremely common conundrum that many businesses face and sadly there is no straightforward answer.  Such a question is very subjective and what works for one business may not work for another.  It all depends, on many factors, however we believe there are 5 questions you should ask yourself before your debt collector is used-

1.  Is the invoice at least 60 days past due?

2.  Is there any dispute with the invoice/work done, and if so have I tried to remedy it?

3.  Have I made at least 3 verbal attempts to speak with the debtor about the account?

4.  Is getting paid more important than keeping the customer?

5.  Am I prepared to lose the customer once I send the account to the debt collector?


It is vital all these questions are addressed before you send the account on.  Certainly the most important is the willingness to lose the customer.  Nobody likes being the subject of a debt collector’s attention and in most cases it is highly unlikely the customer will want to do business with you again as a result.  Many businesses will not be fazed by this and will figure that if a customer is prepared to take advantage of your credit terms to such a degree, then they are better off without them.  This mindset however is quite narrow however and a slow payer now doesn’t necessarily mean a slow payer next time.  They may just be going through a tough time financially and provided they are willing to ask for assistance via a payment arrangement or by just making an effort to pay, you may just be able to kill two birds with one stone.  Customers who hang up or do not phone or email back when you have asked a direct question regarding their account are possibly candidiates for action sooner rather than later, but again, be sure you and your company are prepared to lose them first.


When is the right time to send an account to a debt collector?

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