If you have put your passion into a business or a career, you probably want to focus on the positive even more than other people. After all, why think about the worse aspects of doing business when you love what you do? But open accounts in the red aren’t doing anyone any favors.
Older debts are often harder to collect. In some cases or jurisdictions, there may even be a statute of limitations on when to initiate business collections. Also, many debtors have more than one significant debt and they may be headed towards larger problems like insolvency or bankruptcy. It’s often best to initiate a claim before something like that happens to a debtor.
Revenue is always a backbone of business, and delinquent accounts can have unexpected consequences no matter how small they are. For example, collections get more expensive as they age and it is often necessary to share some of the recovered funds with collection agents and other professionals. In essence, you would be waiting longer to get paid less.
If you ever want to apply for a loan, every dollar of assets and liabilities matter. In a smaller way, a business’ reputation can be damaged if clients do not settle their accounts. Small business owners in small communities often know what that is like.
An attorney can always advise on the decision to make business collections a priority for your establishment. Legal representation is often a good idea when it’s time to get serious with debtors and get your business in the black where it belongs.