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As a leader in the commercial debt recovery industry, NJIC has gained great insights into the world of business and finance. We would like to share our thoughts and experiences with you in this area - something we call NJIC DebtClips.

The Value of Time As a Measure of Cashflow

With the current downturn in the economy, the need to quickly recover your company's outstanding receivables is critical to running a successful business. The longer you wait to pursue that elusive debtor, the more money you are losing.

The effects of uncollected accounts receivable can have a devastating and dramatic effect on your organization's cash flow. Uncollected accounts drain your organization in two ways: money and time. The notion that "time is money" has never been more meaningful as it applies to delinquent accounts. First, the more money you have on the street the less money you have to invest back into your business. Second, the more time you spend chasing down delinquent debtors, the less time you have to run a successful business.

Don't be deceived -- debtors know this and will attempt to string out the creditor as long as possible until you either write off the debt or simply give up trying to collect what is rightfully yours. The key to successful debt collection centers upon time management. Whomever controls the clock -- be it creditor or debtor -- will, most likely, be victorious. The longer an account goes uncollected, the less likely you are to recover the full dollar amount of the debt. Thus, the value of your uncollected dollars decreases over time.


The longer an account is left unpaid, the more likely the debtor may declare bankruptcy or go out of business. The key to leveling the playing field to your advantage is to recognize problem situations -- when signs of delinquency emerge, be proactive and not reactive.

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