Debt Collection Information, Tips and Advice
Don't wait too long
The #1 cause of bad debt is procrastination. If an account is past the due date, don’t accept stall tactics. Each Canadian province has its own Statute of Limitations, and most are just 2 years. The statistical likelihood of collecting diminishes with every passing day. Use this Debt Recovery Calculator to see the value of money owed to you in real-time.
How Collection Agencies Work
When your business has trouble collecting overdue accounts receivable, the repercussions can be severe. Cash flow is impaired, and it can become hard or impossible to meet your own financial obligations to payroll, rent, the bank and vendors. Sometimes you can handle the collection issue in-house, but even the biggest companies with Accounts Receivable teams encounter problems at times.
Collecting delinquent accounts is a job for professionals. That’s where collection agencies come in: they collect overdue bill payments all day long, every day. As debt collection specialists, a good collection agency is a well-orchestrated team of experts, adept at tracking down debtors, finding solutions, leveraging third-party psychology and negotiating payment.
A credit-reporting collection agency is uniquely positioned to collect debt, because it reports submitted accounts to national (and in rare cases even specialized regional) credit bureaus. By doing so, the collection agency directly impacts the debtor's credit record until the debt is reported as paid.Read More