Aged Receivables — A 90-Day Recovery Playbook

The premise

Most agencies look at aged receivables once a quarter, panic for a week, send a few collection letters, and then go back to ignoring them. The recovery rate on receivables follows a steep curve: 30 days old has near-100% recovery, 60 days has about 70%, 90 days drops to 40%, 120+ is below 20%. The math argues for weekly attention, not quarterly heroics.

The 90-day playbook

Days 1-30: Statement goes out on day 1 with a clear due date. On day 14, send a courtesy "your premium is due in two weeks" reminder by email. Most agencies skip this and wonder why so much premium ages past 30 days.

Days 30-45: First collection email. Friendly but unambiguous. Subject line: "Past due premium for [policy number]". Include the policy details, the amount, the bank details. Don't make the client guess what to do next.

Days 45-60: Phone call from the producer who wrote the policy. Not the bookkeeper; the producer. Reason: the producer has the relationship, and the producer also has the financial incentive to resolve it before commission clawback.

Days 60-90: Certified-mail demand letter referencing the cancellation provisions of the policy. The carrier may or may not be ready to cancel for non-payment, but the client needs to know that's where this ends.

Day 90: Decide. Either accept a payment plan in writing, or cancel the policy with the carrier. Carrying the receivable past day 90 with no plan is how agencies quietly accumulate write-offs.

What to track

Average days outstanding (target: <40), recovery rate by age bucket, and the ratio of write-offs to billed premium (target: <0.5%). These are the three numbers that tell you whether the playbook is working.