Collection bucket
A collection bucket is a group of debts within the same range of days past due, for example 1-30, 31-60 or 61-90 days.
How it looks
The portfolio is split by days past due (DPD). A typical scheme: current accounts with no delay, 1-30 days, 31-60, 61-90, 91-180 and over 180. Sometimes buckets are numbered: bucket one, two, three.
Every day debts move between buckets. Those who paid return to current. Those who did not pay move to the next bucket a month later.
Why it matters
Buckets are the common language of collections. They let you compare periods, teams and agencies on comparable debts. Saying “20% recovery” without naming the bucket means almost nothing: for fresh delinquency it is low, for old debts it may be good.
The key metrics are built on buckets: roll rate, cure rate and the write-off forecast. Different buckets are usually handled by different teams with different scripts and rules.
What to do about it
Fix the bucket boundaries and do not change them without need, otherwise the history of your metrics becomes incomparable.
Assign each bucket a stage of work, owners and targets. Review the flow between buckets every month.
Count buckets both by number of accounts and by amount. A small number of large debts can change the picture a lot.
The typical mistake is looking only at the total overdue volume. It may stay flat while the portfolio ages inside, sliding into deep buckets where getting money back is much harder.
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