Collecting Money in a Bad Economy
Yes, it's harder now, particularly for small companies with limited resources. We offer a practical guide to collections
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How do you get customers to pay on time? What do you do if they don't? And how do you determine if you'll spend more time and money tracking down a debtor than the payment is actually worth?
Third-party debt collectors recovered $40.4 billion in 2007, according to a PricewaterhouseCoopers study commissioned by ACA International, a trade group for the collection industry. The study estimated that businesses wrote off $152.5 billion in bad debt that year, based on IRS statistics. (The IRS would not confirm the estimate and said the actual data for 2007 would not be available until next year.) And delinquent debts are expected to increase in 2008 as the struggling economy leaves more people and companies strapped for cash.