Why It’s Time to Prioritize Your Past Due Accounts
At some point, every business will deal with the uncomfortable reality of past due accounts. Rather than ignoring them, you should make them a priority. Your past due accounts are an important part of the health of your business. Let’s look at some of the reasons why you need to prioritize past due accounts.
Aging Accounts Take More Resources
It’s important that your past due accounts are a priority is because the older an account is, the more resources it will take. When you have an account that’s been past due for quite some time, it takes more time to collect on it. You’ll have to spend more time going through old files to ensure that you have the right information to collect on it. You may have to devote time to locating the debtor. If you decide to take the debtor to court, you could end up spending a large sum of money to hire an attorney or to even file your small claims case. Making your past due accounts a priority means that you work to collect on them sooner which makes it easier and requires less time and money.
Providing Verification of a Past Due Account
When you are collecting on a past due account or if you hire a collection agency to do it, the debtor has the right to request verification. This means that you or the collection agency must be able to provide documentation. This may include providing copies of letters sent out alerting the debtor that the account was past due, the last known payment date and amount, and it may also include a copy of the signed contract. Consider how long you keep copies of your business records – signed agreements, tax records, receipts, and any other business documentation. If you try to collect on a past due account that is three years old, will you still have the proper documentation?
If you or the collection agency are unable to provide verification of the past due account, you may not be allowed to collect on it according to the Fair Debt Collection Practices Act and local law. Prioritizing past due accounts means collecting on accounts sooner – when you know that the documentation is still in the file.
You Need a Business Loan
If you need a business loan and you have past due accounts, you could be in for a shock. Lenders or investors may not be willing to get involved if you have too many past due accounts. These accounts affect your bottom line. Business loans have to be paid back. If you’re not collecting on past due accounts, you may not have the capital that you need to make your loan payments.
Get Help with Your Past Due Accounts
If you need help with your past due accounts, call Clients ARM. We have more than 30 years of experience in handling past due accounts. We also provide many services that can free up your time to continue to build your business while paying only a fraction of the cost of hiring a traditional employee. Learn how Clients ARM can help by reading this article and then contact us for your free process review.
