5 Mistakes That Are Killing Your Collection Rates

Over 20 years of commercial collections, I've seen businesses make the same mistakes over and over. These errors cost thousands in lost revenue every month.

The good news? They're all fixable.

Mistake #1: Waiting Too Long to Follow Up

The Problem: You send an invoice and wait 60-90 days before following up. The Cost: The longer you wait, the lower your recovery rate. After 90 days, collection rates drop by 50%. The Fix:

Day 1: Invoice sent

Day 7: Friendly reminder email

Day 15: Phone call (just checking in)

Day 30: Formal follow-up

Day 45: Payment plan offer

Day 60: Final notice before collections

Why it works: Early contact keeps the debt top-of-mind and prevents "out of sight, out of mind" syndrome.

Mistake #2: Being Too Aggressive (or Too Passive)

The Problem: You either come on too strong (threatening, demanding) or too weak (apologizing, begging). The Cost: Aggressive tactics destroy relationships. Passive tactics invite delay. The Fix: Confident assertiveness

State facts clearly: "The invoice is 30 days past due."

Set clear expectations: "We need payment by Friday."

Offer solutions: "Would a payment plan work better?"

Follow through: "If we don't hear from you by Friday, we'll proceed with our next steps."

Why it works: You maintain respect while enforcing boundaries.

Mistake #3: Not Offering Payment Plans

The Problem: It's "pay in full or nothing." The Cost: You lose recoverable accounts because people genuinely can't pay the full amount at once. The Fix: Structured payment plans

3-month plan: Full amount divided by 3

6-month plan: Smaller monthly payments

Lump sum discount: 80% now, waive 20%

Why it works: Some money now is better than no money ever. And 90% of people who start a payment plan complete it.

Mistake #4: Ignoring the Relationship

The Problem: You treat collections as a one-time transaction instead of an ongoing relationship. The Cost: You collect once, burn the bridge, and lose a potential long-term client. The Fix: The Partnership Approach

"How can we solve this together?"

"What's going on that's preventing payment?"

"Let's find a solution that works for both of us."

Why it works: 90% of the people we collect from become our clients. No other agency can say that.

Mistake #5: Doing It All Yourself (When You Shouldn't)

The Problem: You spend hours chasing payments instead of running your business. The Cost: Your time is worth more than the debt you're collecting. Plus, you're probably not very good at it (no offense—it's not your specialty). The Fix: Know when to outsource Keep it in-house when:

Debt is under 30 days old

You have an existing relationship

The amount is small (<$500)

Outsource when:

Debt is 60+ days old

Customer is unresponsive

Amount is large (>$5,000)

You've tried 3+ times with no progress

Why it works: Professionals recover more, faster, while preserving relationships.

The Collection Kings Difference

We don't just avoid these mistakes—we've built our entire system around fixing them.

Ready to fix your collections? Get a free assessment or contact us.