There’s one account recovery mistake that costs more businesses more money than any other… and odds are it’s ravishing your business too! And if that’s the case, by flushing this out of your business and ridding yourself of this simple mistake, your collections rates will skyrocket.

So what is this ruinous mistake?

Quite simply: it’s holding on to your debts too long.

What few people fully appreciate is the frighteningly accurate relationship that exists between the length of time and account goes unpaid and how much of that account you’ll needlessly throw away.

For instance, if you were to wait 3 months before recovering an overdue account, for every dollar outstanding you can reasonably expect to recover 81 cents.

To illustrate, if you’ve got say $10,000 worth of debts listed on your 90 day debts ledger and you recovered those accounts today then you could reasonably expect to recover only $8,100.

What this boils down to is, by giving your debtors 90 days (i.e. three months) to pay their accounts you’re in effect kissing away almost 20% of your gross revenues.

Now if you have an account outstanding at six months you can expect to recover only 65 cents in every dollar owed to you. In effect you’ve flushed away 35% of that revenue.

And if it takes you 9 months to recover an account you’ll effectively wave half of it good-bye.

Now from all of this there are two take home messages.

Firstly, the longer it takes you to recover an account the less money you’ll actually recover.

Secondly, and more importantly by reducing the time you allow your customers to settle their accounts from 3 months to 30 days you’ll effectively catapult your recovered income by a whopping 20 to 25 percent! And that’s without any extra effort, expense, or output.

Clearly then this is a huge source of untapped profit hidden inside your business. And all you have to do to unleash these profits is reduce~shorten the length of time you give your debtors to pay.

So why then does the value of an un-recovered debt diminish the longer you let it slide?

To get a feel for what’s actually going you need to understand that for each individual on your debts ledger there’s a swag of other people also chasing them for money. Now owing multiple businesses lots of money your debtor’s initially survive by pulling the wool over everyone’s eyes. It’s not until someone applies serious heat that they make a genuine effort to pay their account.

Now as time passes not only do more and more creditors press hard for their money but the debtors’ own financial position gets tighter and tighter.

The upshot of all this is if you keep trying to recover the debt on your own while other creditors bring in Professional Debt Collectors well naturally you’ll be at the back of the line when it comes to who’s going to get paid first. It’s a classic case of the creaky hinge gets the oil. And because they know they can keep putting you off it should come as no surprise that they pay their other creditors who are pressing harder before they pay you.

And by the time you eventually start pressing for repayment the pantry is bare.

Now they say desperate times call for desperate measures. So when your debtor eventually runs out of cash that’s when they become unpredictable and dangerous.

Left with little choice they’ll do one of two things: they’ll either go underground or they’ll come out fighting. And this fighting usually takes the form of them falsely disputing the debt in the knowledge that with rare exception debt collection agencies won’t pursue a disputed account.

Which all leaves you dangling at the end of a rope~ with practically no one to help you.

So as you can now appreciate, this explains why Debt Collection Agencies experience great difficulty trying to recover aged debts. And while it’s easy to point the finger at a for failing to recover an old account, the harsh reality is that it’s the business owner who’s actually set both themselves and the collection agency up for failure.

So stop setting yourself up for failure. Give your debtors no more than 30 days to settle their accounts and your profits will instantly skyrocket by 20%!