The most common question a business has before referring an overdue account is: how long will this take? The answer is honest but unsatisfying: it depends. But the factors that determine it are mostly within your control.
What typically happens in the first few weeks
After a debt is referred and the file is assessed, a letter of demand is usually issued within a few business days. Many commercial debtors respond to a formal demand within the demanded period — seven to fourteen days is standard — either paying in full or making contact to discuss arrangement. For these accounts, resolution can happen within two to four weeks of referral.
When it takes longer
Accounts that do not respond to a letter of demand move into structured follow-up — calls and written contact on a defined schedule. This phase can take several weeks, and outcomes vary: some accounts resolve in follow-up, some need escalation, and some are uncontactable. The age of the debt at referral is one of the strongest predictors of how this phase goes — older accounts are harder.
The single biggest factor
The factor that most influences how quickly an account is resolved is how early it is referred. An account referred at 60 days is significantly easier to recover than one referred at 180 days. The debtor is more reachable, the record of the debt is fresher, and there is less chance the debtor has become insolvent or otherwise unable to pay.
What you can do
Set a fixed escalation point in your credit process — a day count at which an account moves from internal follow-up to external recovery — and apply it consistently. The businesses with the best recovery outcomes are not the ones with the most sophisticated credit processes; they are the ones that act early.
Refer an overdue account — the sooner it is referred, the better the outcome.