Once an outstanding debt reaches time-barred status and is no longer collectible, there is little that a creditor can do to recover the amount owed, so the best approach to handling time-barred debt is to avoid getting to that point in the first place.
If you want to ensure that your outstanding balance doesn’t fall into time-barred territory, here are six tips to help you stay on top of your collections.
Maintain an Accurate Database
The first step in stopping debts from becoming time-barred is to ensure that you have an accurate database including all the details of your open accounts, amounts owed, and any other relevant information.
Having all this information at your fingertips will make it much easier to keep track of debts as they become delinquent and progress toward time-barred status.
Have a Calendar You Actually Use
Having a calendar is one thing. Actually using a calendar is something completely different.
The first one is not enough, so in addition to putting all of your accounts into some form of calendar, you also need to make sure that you make checking your calendar a regular part of your daily routine.
This is the best way to ensure that delinquent accounts aren’t slipping through the cracks and missing out on the attention you need to pay them at specific times.
Schedule Time to Review Accounts
In addition to having a calendar of collection account events, you should also schedule time to review all your accounts regularly. This could be weekly, monthly, or even quarterly, depending on the number of accounts and the dollar volume under your watch.
Once again, the key is to make it impossible for any delinquent account to slip through the cracks. Scheduling this as part of your work routine will help you stay on top of all critical dates as a part of your regular business tasks.
Document Everything
All those calendar events and scheduled reviews won’t make much difference if you aren’t working with accurate information, so implementing excellent documentation practices will also be a key component of minimizing the number of debts that become time-barred.
From the beginning stages of issuing credit to a customer, you should keep a digital file complete with all contracts, invoices, statements, and notes of any communications. Having all this information in one central place is critical to your success.
Be Willing to Make a Deal
As time-barred deadlines are approaching, you should be willing to consider making a deal to get something rather than nothing out of the debt before it crosses over into uncollectible territory.
Taking less than the total amount owed, plus penalties and interest, is never optimal, but sometimes, taking what you can get ends up being a better deal than getting stuck with nothing.
Set Follow-Up Reminders
One specific thing you always want to document AND put on a calendar is to follow up on any communication you have with a debtor. If someone says that they are going to do something, make sure that you are reaching out to them whether they come through or not.
If they do come through, follow up to schedule the next step in getting that balance to zero. If they don’t, reach out to see what the problem might be.
No matter the situation, no commercial debt collector wants to see a debt fall into time-barred status. Following these six simple tips will dramatically reduce the odds that the debts you are responsible for progress in that direction.
