Time is a powerful thing. In some circumstances in cannabis, time can be your friend. Giving your plants an extra week to flower so that they can reach optimum potency and flavor profiles, is a good idea. Adding an extra day to review a contract, is a great idea. Leaving your freshly blasted concentrate slab in vacuum ovens for an additional 12 hours, so it purges appropriately, is a great idea.
When you take the extra time, to hand manicure and trim your bud for a beautiful presentation, that is a great idea. Many number of things in cannabis benefit from additional time. However, when looking at cannabis debt collection that is most certainly an exception to that rule.
Time is of the essence
Collections fall under the time-is-of-the-essence category. When you wait to send a debt into the collections process, it is rarely rewarded. In fact, most of the time waiting to send a debt to collections is punished. The longer a debt takes to make it to collections, the less of a chance you have to collect.
Every day that your customer is delinquent in payment, their chance of making that payment goes down, causing further legal action, like a lawsuit, more probable. And as we can all imagine, the goal of collections is to recover the client’s debt without the need for a lawsuit. Lawsuits take a lot of time, they will cost a lot of money, and should only be used when absolutely necessary.
The goal of a collection agency is to make a successful collection without the need for litigation.
The chart below (from the CLLA.org) describes the percentage chance of a successful collection by the months delinquent in payment. As you can see, there is a significant drop off as time passes. At three months there is almost a 3/4 chance to collect the debt. By waiting for an additional three months (making the debt six months delinquent) the percentage chance of collection drops to slightly more than 1/2. Those are never odds one should take when trying to recover money owed to them.
This chart shows a direct correlation between someone holding onto a debt and their chances of getting paid back. The longer a creditor waits, the less chance that creditor will get paid.
Think about it, as a business person with ethical and moral principles, do you really want to extend someone the courtesy of extra time to pay who have disregarded you and your business by not paying you back on time, within the terms that you both agreed upon.
When a claim arises, do not hesitate. That money is yours; the terms you signed and agreed to entitles you to that money when it’s due. If the debt becomes delinquent, send it to collections as quickly as you can.
Seven Basic Facts On Debt Collection
Provided below are seven basic facts that you should be aware of:
- Again as we stated above, don’t wait to start making your collection effort. The longer the account remains unpaid, the less likely you’ll be successful in collecting the debt.
Do you have customers who haven’t paid you for your services? Wondering if you should go through a collection agency? Click here and read our previous article. Keep an eye out for our next article and if you have any questions email us here.
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