All 23 Collections & Bad Debts questions
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How do payment plans help recover distressed receivables? What legal/regulatory considerations apply to collections? How does dispute management connect to collections and bad debt? How do CECL and IFRS 9 change bad-debt estimation for receivables? How do you handle receivables when a customer files for bankruptcy? What is factoring and how does it differ from a collections strategy? How is bad-debt expense presented in the financial statements? How do you decide when to write off versus continue pursuing a debt? How do you calculate and interpret the bad-debt-to-sales ratio?
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Accounts Payable & Receivable › Collections & Bad Debts

What escalation options exist when internal collections fail?

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Answer

When in-house efforts fail, options include: placing the account with a third-party collection agency (contingency fee), selling the debt to a debt buyer at a discount, pursuing legal action/small-claims, or negotiating a settlement or payment plan. The choice weighs recovery odds, cost, customer relationship, and the balance's size.
Real-world example A stubborn $30,000 balance is placed with a collection agency on a 20% contingency after final demands go unanswered.

Common follow-ups: How do agency contingency fees work? | When is settling better than suing?

Credit Control Aging Analysis Collections & Bad Debts
All 23 Collections & Bad Debts questions