The collection of overdue accounts is a challenge every business eventually faces. While using debt collection services is rarely a choice, sometimes it can become a reality for a business owner. Many situations lead to your customers not paying an invoice they owe due to unforeseen circumstances such as: loss of work, a major health issue, or a change of address. These are just a handful of reasons why your customers are not paying an outstanding invoice and you are left with an overdue account. The question remains though, “how do I get the money I am owed?”. The answer to that question is twofold: information and time.
In an ever-changing world that is more and more online the most valuable commodity, you can have to help get paid is information, because as the old adage goes – knowledge is power. The more information you have on hand the easier it is to get paid. Easy ways to gather that information are through credit applications, credit reports from TransUnion and Equifax, and with data mining technology to automate skip tracing. These are great resources to use and ensure your customers’ information is correct which in turn increases the likelihood of getting paid on time.
The next most important factor in making sure you get paid is time itself. The hard fact is the longer you wait to collect your money the lower your chances of successfully recovering it. People move away, change phone numbers, and forget they even owe a bill as time goes by so the quicker you deal with it internally the better. You are also up against government legislated Statutes of Limitations that dictate how long after the fact you may collect an unpaid invoice. In New Brunswick it is six years from the date of last invoice or acknowledgment of the debt, while you only have 2 years from the same dates to file a legal action. Statutes of limitations vary by jurisdiction and can usually be found on most
provincial government’s websites.
Time and information are the most critical components to collecting an overdue account. Keeping your customer records up to date will help reduce the number of overdue accounts by allowing
you to reach them when you need to. The Statutes of Limitations put a timeframe on how long you can legally collect overdue accounts. Debt collection services is a difficult aspect of any business, but there are practices that help alleviate the stress of it provided you have as much information as you can obtain and promptly act on overdue accounts. Don’t let time and information be the reason your customer doesn’t pay you.