Finance News & Insights

A key Finance metric: When to turn over over past-due debts to a third party

Here’s a question finance chiefs often struggle with: Has come to turn over a dragging customer to a third party collector?

You don’t want to jump too soon and jeopardize the relationship. But wait too long and even the most skilled collector won’t be able to wrangle that cash back.

So where’s the cash-flow maximizing sweet spot?

New benchmarks can help, courtesy of Atradius Collections Global Collections Review: Europe, Americas and Asia Pacific.

Most common: 61-90 days late

The report looks at how your peers are handling delayed payments – a trend they expect to increase in the next 12 months.

Take a look when other finance shops in the Americas decide it’s time to tap the big guns and send accounts to a debt collector:

  • 61-90 days late: 29%
  • 31-60 days late: 28%
  • 90-120 days late: 20%
  • 1-30 days late: 12%.

The eye-opener here: Almost no one waits until debts go 121 days late or later any longer.

In fact, just a month past due will get more than a quarter of your peers reaching out for backup.

May be time to start paying more attention to that agings bucket.

Info: To download the complete report, go to fcibglobal.com/pdf/atradius/Atradius_Country-ACGCR-2017.pdf

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