Time is a powerful thing. In some circumstances in cannabis, time can be your friend. Taking an extra day to review a contract, great idea. Giving your plants an extra week to flower, so they can reach optimum potency and flavor profiles, is a good idea. Leaving your freshly blasted concentrate slab in vacuum ovens for an extra 12 hours so it purges properly, is a great idea. Taking the extra time, to hand manicure and trim your bud for a beautiful presentation, is a great idea. A many number of things in cannabis benefit from extra time. However cannabis debt collection is most certainly an exception to that rule.
Collections falls under the time-is-of-the-essence category. Wasting time getting a debt into the collections process is rarely rewarded.
In fact, most of the time waiting to send a debt to collections is punished. The longer a debt takes to make it to collections, the less of a chance you have to collect. Every day that your customer is delinquent in payment, their chance of making that payment goes down, making further legal action, like a lawsuit, more probable. And as we can all imagine, the goal of collections is to recover the clients debt without the need for a lawsuit. Lawsuits take lots of time, cost extra money, and should only be used when absolutely necessary.
The goal of a collection agency is to make a successful collection without the need for litigation.
The chart below (from the CLLA.org) describes the percentage chance of a successful collection by the months delinquent in payment. As you can see, there is significant drop off as time passes. At three months there is almost a 3/4 chance to collect the debt. By waiting an addition 3 months (making the debt 6 months delinquent) the percentage chance of collection drops to slightly more than 1/2. Those are never odds one should take when trying to recover money owed to them.
This chart shows a direct correlation between someone holding onto a debt and their chances of getting paid back. The longer a creditor waits, the less chance that creditor will get paid.
Think about it, as business person with ethical and moral principles, do you really want to extend someone the courtesy of extra time to pay who has disregarded you and your business by not paying you back on time, within the terms that you both agreed upon.
When a claim arises, do not hesitate. That money is yours; the terms you signed and agreed to entitles you to that money when it’s due. If the debt becomes delinquent, send it to collections as quickly as you can.