Age of account balances
How long should an outstanding balance remain on the accounts receivable report? What if any is there a time frame allowable by law to collect on old balances? I am located in Tennessee.
Hi Tammy, this is a great question and one that I’m sure many other small business owners have. I don’t believe there is a law that says “after X number of days” you can collect on old balances. What I believe is that once an invoice becomes past due (delinquent), you have a right to take the necessary steps to collect on that debt.
However, be sure to stay away from tactics that could be considered “harassment”. I’ve got a couple of articles that should help you implement a professional and formal collection process. Take a look at the following two articles for tips on how to collect on past due invoices. I’ve also included advice on steps you can take to avoid this issue in the future.
Crystalynn Shelton, CPA