Aging Accounts

Aging Accounts
February 9, 2015 MMadmin

Aging AccountsThe age of an account can have a great affect on it’s collectability. In most circumstances, the older an account is the more difficult it is to collect.

As time goes on it can become more difficult to locate a debtor. People move to new homes, new towns, new states. They change phone numbers and jobs. They may do this several times over the course of a few years. Each change can make locating a debtor more difficult. If you can’t find them, you can’t get payment from them.

The collectability of an account goes down as the account nears the statute of limitations. The statute of limitations on an account is the number of years you have to pursue an account from the last date of charge or payment (whichever is most recent). For example, the statute of limitations in the State of California is 4 years for a written contract. You would have 4 years from the last date of payment or the last charge to take that account to court. Each state decides the statutes of limitations for different types of accounts – open accounts, judgments, oral contracts,etc.

The faster you can move forward on an outstanding account,the more likely you are to receive the payment due to you. This is truly a situation where time is money and the more time you let pass the greater the chance you’re letting your money slip away.