Why should you take action as soon as your accounts receivable are past due? Because time is not on your side.  The longer you wait to begin collection actions, the less likely it becomes that you’ll receive what you’re owed.

The Commercial Collection Agency Association’s study dated 10/18/2004, shows collectability of delinquent commercial debts at time intervals after the due date.

Due date : 94.9%
30 days: 89.9%
60 days: 81.3%
90 days: 69.6%
6 months: 52.1%
9 months: 39.1%
1 year: 22.8%
2 years: 9.3%

In future posts we’ll cover collection strategies and the establishment of credit guidelines and procedures to help reduce receivables from becoming delinquent.