Debt age impact calculator

Why debt age is the most important factor in recovery

Of all the variables that affect whether a commercial debt will be recovered — debtor type, documentation quality, invoice size — none is as consistently predictive as age. Debt recovery agencies, including those managing large Australian commercial portfolios, track collection rates by account age and the data tells a clear story: the curve drops sharply between 30 and 90 days, and again past 12 months.

The 90-day cliff

Industry data places average commercial debt recovery at 75–85% for accounts under 30 days. By 90 days that average is closer to 60–65%. By six months, recovery rates typically fall below 50%. The 90-day mark is known as the "cliff" because debtors' behaviour changes after this point — they have survived three billing cycles without paying, and many have mentally written off the obligation.

Before 90 days, most debtors will respond to a formal letter of demand without the need for legal action. After 90 days, the proportion of matters requiring legal escalation increases substantially — and so does the cost of recovery and the risk of collecting nothing.

The cost of waiting — a real example

On a $20,000 debt referred at 30 days, an estimated 85% recovery yields around $17,000 before commission. The same debt referred at six months returns an estimated 35% — around $7,000. The $10,000 difference is the true cost of waiting four months to act. That cost compounds for every account in your ledger.

Merion's commission-only model means referring early carries no financial downside. If we don't collect, you pay nothing. The only question is how much you can still recover — and the answer gets smaller every day.

Recovery rates shown are indicative estimates based on published industry averages for Australian commercial debt. They are not a guarantee of any particular outcome. Actual recovery depends on the debtor's circumstances, documentation and other factors.