Debt Collection, or Lack Thereof
As reported recently by The Long Beach Post, according to an audit of the City’s Business Relation Bureau that spanned two years, $2.4 to $2.6 million in outstanding business license accounts have not been collected by the City of Long Beach. http://www.lbpost.com/business/2000001889-city-auditor-2-4-to-2-6m-in-delinquent-business-license-accounts-uncollected#.UTTbYldZ_Q8
Residents are fuming at the lack of tenacity through which the city (has not) collected on the debts, meanwhile taxes and fees continue to rise. City Auditor Laura Doud noted a lack of “comprehensive policies and procedures for the collection process” and that there “does not appear adequate oversight is in place.”
Statistically debts become harder and harder to collect as time goes on. According to The Commercial Collection Agency Association, the collectability of commercial debts is as follows:
• Due Date – 94.9%
• 30 Days – 89.9%
• 60 Days – 81.3%
• 90 Days – 69.6%
• Six Months – 52.1%
• Nine Months – 39.1%
• One Year – 22.8%
• Two Years – 9.3%
To view the 24 page Audit Report: http://www.scribd.com/doc/127773940/City-of-Long-Beach-Business-License-Revenue-Collection-Audit-February-2013
By Kim Onisko, CPA