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    2 Replies Latest reply on Oct 25, 2008 11:04 AM by BillCollector

    Slow Paying Customers Killing Your Business?

    BillCollector Wayfarer
      Most businesses these days don't have the extra cash available to hire an attorney to chase delinquent customers.

      Collection agencies provide a cost-effective alternative through a No Collection - No Charge fee structure. If they don't collect, you don't pay.
      Top performing collection firms work on this fee structure. If an agency asks you to pay a fee up front - there's no incentive for them to collect your money as they've already been paid.

      Third party debt collection can provide your business with fast cash flow, reduced payroll expenses and an increase in staff morale as they don't have to chase slow payers.

      Make sure the collection agency you select is licensed to do business in your state and has proper bonding. We highly recommend that the agency also has errors & omissions insurance in place to mitigate the risk to you.

      And finally - commission rates for a top performing agency will range from 25 to 50% depending on the age of the account and if your customer is an individual or a company.

      It's your money - What are you waiting for?

      BillCollector
      www.accountadjustment.us
        • Re: Slow Paying Customers Killing Your Business?
          amspcs Ranger
          Usefill info from Billcollector, thanks! . To add to his info, it should be said that the key to successfully collecting late receivables is to act on them quickly one way or the other, NEVER just sit on them. This means beginning your own internal collection efforts or contracting for professional services very early in the delinquency process, preferably at the 30 day but no later than the 60 day delinquency level. If you wait until your delinquncies become 90 days old or older, chances of collection fall to almost nonexistent levels regardless of how you attempt to collect them, including professional collection services. My credentials to make these statements are from a previous career many years ago when I worked as a small business consultant specializing in accounts with receivables problems.

          An even better way to deal with past due receivables is to avoid the problem before it happens. More and more businesses of all kinds these days offer credit card acceptance as an effective means of avoiding receivables issues altogether. Obviously, 3% or so in processing fees makes much more sense then the cost of collecting receivables which easily can reach well in excess of 40% considering the cost of payroll to internal collection employees, cost of repeatedly sendout out statements and collection notices, collection agency expenses and so forth. I am in the processing business if anyone would lke to discuss this concept further.

          Finally, if anyone out there has collection problems stemming from NSF checks, you should know that there are reputable firms out there who offer very effective NSF check collection services absolutely free of charge to the merchant--the bad check writer pays the collector which is the way it should be. Anybody interested in details is welcome to contact me.

          Hope this is useful info. And happy birthday to me !!!!! 61 Sunday !

          AMSPCS
          www.MerchantServices-help.com
            • Re: Slow Paying Customers Killing Your Business?
              BillCollector Wayfarer
              AMSPCS is offering sage advice; the best defense is a good offense.

              In today's tightening credit markets, businesses are becoming more creative in finding ways to help their customer make larger purchases. This often involves offering in-house financing where you are extending terms to your customers. This is where sound credit granting policies are crucial to your survival. Please see our forum thread entitled "13 Steps..." In this article, you will find ideas on how to best manage your in-house accounts. While this list covers most of the basics, it does not replace the value of having a professional credit manager on staff.

              As a collections expert for the last 24 years, the best advice we can offer is to ensure the credit application is filled out completely and to know your customer. What is their corporate structure? What is their exact company name? Who are the authorized purchasers? Do you have a personal guarantee or indemnity clause in your credit application to tie the customer into the transaction personally? All of this information is vital during the collection process if it should occur.

              Your relationship today with a brand new credit customer is as good as it is going to get. After today's date, it will either stay the same or get worse. While healthy business relationships are the backbone of a buoyant economy, it doesn't hurt to pre-plan the divorce.