DEFINITION:

• A problem account is an account which has become one or more days past due on any invoiced amount or any specified payment due date.

THERE ARE ONLY 3 STEPS to resolving any problem account completely:

• Letters
• Phone or In-Person Calls
• Lawsuit

Any business can and should perform steps 1 & 2 as can a collection agency or an attorney. Steps 1 & 2 should be entirely COMPLETED WITHIN 70 DAYS of the due date of the unpaid amount. Step 3 should be started no more than 90 days after the due date. Your timing and actions strictly determine your recovery rate.

CORRECT STEPS TAKEN IN ORDER, AND ON TIME, WILL PRODUCE RECOVERY IN THE SHORTEST AMOUNT OF TIME AND WITH THE LEAST DOLLAR LOSS OR COST.

YOUR COST/LOSS RISK INCREASES EACH DAY

• From day 1 through day 90 of a problem account situation, you should take the mental position that your cash is lost to you for current use but some or all of it can be recovered. Each day late is a cost to you in lost interest, costs and risks of recovery. Costs increase as time goes by, which is why IT IS SO IMPORTANT FOR YOU TO TAKE THE NECESSARY STEPS ON TIME.
  
  
• At any point when your problem account tells you they will not pay, or you become convinced they won't pay, you must shorten the process and move to file a lawsuit. If you have a live lien or stop notice, you must find out about and take steps to protect your rights or they may be lost.

• A lawsuit process can require payment, rather than request payment. Letters and phone calls are methods that ask the problem account to pay but do not force the payment. At the end of the lawsuit process comes the ultimate consequence of a judgment. With a judgment comes the legal right to take the money from your problem account without asking.

YOU SHOULD NEVER LOSE ALL YOUR MONEY IN AN OVERDUE RECEIVABLE IF YOU TAKE THE STEPS OUTLINED ABOVE!