Debt recovery is never easy for any business, but just how bad is it out there for small businesses? Late paying customers can be lethal to these businesses, so how many are struggling with delinquent accounts? Thanks to a survey done on debt collection by Rocket Lawyer, we’re able to see just how large of a problem debt recovery is for small businesses. The numbers just might shock you.
Debt Recovery Struggles: Just How Many Small Businesses Have Trouble Collecting?
It’s crazy to think: 1 in 4 small business have trouble collecting. That’s 25%! And of that 25%, 49% write off bad debt. Wow. If only those small businesses could find a way to enhance their debt recovery.
What’s an even scarier figure is that of that 25%, 43% have customers that are more than 90 days past due. Accounts that are that far past due are almost impossible to collect.
What’s the solution? To begin, these small businesses really need to put their debt recovery into high gear prior to the 90 day mark. The earlier they can really heat up their collection efforts, the better the chances are for them collecting. To resolve these issues, small businesses say they call, send formal letters and email, but none seem to be providing customers with other options to ease the payment. Employing installment plans could make a huge impact for those accounts that are going 90 days past due.
Case in point: debt recovery is plaguing small businesses. If you find yourself as part of this statistic, as 1 of the 4 small businesses out there struggling with late paying customers, don’t be afraid to seek methods to optimize your accounts receivable management. The financial impact it can have on your business is immeasurable and one not to be missed.