When Should Receivables be Placed for Collection with an Outside Collection Specialist or with in House Counsel?

accounts-receivable-cartoonIf a company is funded by a bank or other lender, the answer when to use a collection attorney is clear. There is an expectation by the lender that  in order for the lender relationship to continue receivables are to be collected within 60 or 90 days.

Companies with collection policies have set schedules as to when  receivables are to be placed with collection professionals. Usually 90-120 days is determined to be a realistic consideration of tolerance for risk, need for cash flow and likelihood of payment. This enables an in-house collection department to actively work on aged receivables  and use staff to collect receivables that have a higher chance of being paid.

Those businesses that do not have a set schedule of referring claims out for collection struggle most with the decision. The periodic review of the receivables report can be both time and emotionally exhausting. Time spent on the aged invoices prevents you from concentrating on other profitable areas of your business. Our suggestion is to set a policy to place the accounts for collection when they have aged  60-90 days.

If you have any questions about when, how or would like to learn about how to place receivables for collection, contact this New York Debt Collection Firm by email info@ffgnesqs.com or call 212-686-0100.