Your actions at this point of your credit-collection procedures are vital. Your reaction can mean the difference between recovery or loss. When you identify a potential bad debt, you need to act promptly and decisively. Usually the more time that passes, the less consumers pay. Accounts that are carried indefinitely usually originate with creditors who do a limited amount of business, have the highest credit losses or the lowest debt recovery.
Most national associations keep track of averages of delinquency for their industry.
Reducing Bad Debt You should have a standard, in-house written policy on handling accounts. The policy should include when to call new customers, when to call established customers and when to send letters. Assuming that there is regular account billing, you will find that most credit users will pay as agreed. A certain number will pay after a mild reminder. Some will encounter a change in economic situation that makes it difficult to pay, such as illness or loss of job.