I’ll put this right up front; we are not a CPA firm and we are certainly not lawyers. We are a collection agency. But our customer service reps get a very frequent question at this time of the year. Can I still collect on accounts I’m writing off?
The short answer is yes. There is no harm in continuing collection efforts on accounts you have already written off. If you do end up getting paid on those accounts, then you’ll need to check in with your CPA or tax attorney on how you handle that on your books.
The reverse is also true; if a collection agency is already working accounts and then you decide to write them off, collection agencies can still continue to work those accounts. Again, if you end up collecting on those, you’ll need to consult with your bookkeeper or CPA on how to adjust your books properly.
While you may certainly have accounts that go unpaid that spill into a new calendar year, one of the best ways to minimize this happening is to keep up on your late receivables. Staying on top of your late and non-paying clients and having a system in place for those accounts year round will save you a lot of aggravation at tax time, wondering what to do with all these accounts that have gone unpaid.
It really makes no sense leaving all your unpaid accounts until you close your books at the end of the year. A business should be tracking receivables every month and acting accordingly on a regular basis; not just once a year.
Check out a past video we did on this subject with even more advice.
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