Unfortunately, in today’s business world bad debt is an unavoidable problem for all organizations. Among many other issues, this problem can lead to restricted cash flow preventing business growth and in a worst-case scenario, can even lead to bankruptcy. In fact, bad debt is the number one reason that companies go under. Collecting debt is arduous, time-consuming, and costly to an organization in terms of the labor dedicated to collections.
Can I just write off the bad debt?
Many companies tend to write off bad debt thinking it’s an easy way to get the debt off their books. This is not always the best solution, and the example below proves that point.
“If you had $20,000 in write-offs last year and a profit margin of 4%, you would need $500,000 in additional sales to compensate for your write-offs.”
Simply put, companies tend to lose more money than they think when writing off bad debt.
When should I turn a debt over to an experienced collection attorney?
There are many indicators that will help you determine when to send your outstanding debt to an experienced bad debt collections attorney, however, the best indicator is typically the age of the receivable. Statistically speaking, once a commercial debt is 90 days past due, it becomes increasingly harder to collect. The longer you wait the harder it is to collect, although we have had solid success in collecting overripe debt.
What do you do when all else fails?
When the phone calls, letters, and personal visits are no longer productive, it is in your best interest to call an experienced professional debt collection attorney. Their focus is to collect all outstanding debt, whether through litigation, or post-litigation collection efforts.
If you are in need of a knowledgeable and experienced commercial debt collection attorney in Boston, Worcester, Springfield, and throughout Massachusetts, please give us a call at 508-620-6900 or click here to submit and inquiry online.