Aug 4, 2020
When a business is at risk, there will always be five warning signs. However, the third warning sign can be a real tipping point. This situation is when an account is 60 to 90 days past due. It is critical, and speed is of the essence if you want to collect your owed fees.
What You Should Know About The Third Warning Sign
Seeing the third warning sign is a significant cause for concern for collecting from a company. However, if you’re not convinced of the urgency of the situation, we urge you to keep reading so you have an idea of what you can expect if you let the account stand idle for a little while longer.
You, Will, Start Seeing A Dramatic Difficulty Increase When It Comes to Collecting from a Client Who is Displaying the Third Warning Sign
The third warning sign typically consists of an account being 60 to 90 days past due. At this point, you usually have a 71% chance to get your fees. However, if you leave it for another 30 to 45 days, you can expect a dramatic increase in difficulty to collect for several reasons. Your chance to collect from the company in question is cut in half if you leave it for 30 days.
Bankruptcy is Very Likely After This Point
Once you start seeing a company reach this point, you’re very likely to hear rumblings of bankruptcy. Rumors of bankruptcy are not a good sign for you because of the high likelihood that you’re not going to be able to collect. Especially since staffing and recruiting are considered third tier debt, and you’re almost always the last to get paid.
We’ve had a client sit on a problem account for 120 days that we managed to collect from because it was staffing related, and there were angles we could follow on. However, if that same case were recruiting fees, it’s done until it makes its way through bankruptcy courts.
Bankruptcy Courts Can Take Years To Get To You
Bankruptcy courts are usually an 18-month process. However, the pandemic is currently stopping bankruptcy courts from holding hearings, and it can take a while before they start up again. You could be looking at 3 years just waiting for you to be able to collect that fee. By that point, the company that you’re dealing with could be gone entirely.
Conclusion
The third warning sign is a massive red alert for any staffing and recruiting company looking to collect. It is also one of your last opportunities to collect from a company. Whether you do it by utilizing our services or with your favorite attorney, you have to make sure you do something before it’s too late.
Key Takeaways
● People are still having issues, bankruptcy is still being filed but what's happening right now is that everything is getting bogged down.
● Make sure your documentation is in order because judges, to clear their calendar, will start using default and summary judgments more aggressively.
● Statistically, if someone is telling you “hey I’ll pay you in 6 months” at that point you have to do something. Use us, don’t use us, doesn’t matter you HAVE to do something.