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Maintaining Optimum Cash Flow

From The Desk of Jerry Curtis

Dear Customer:

For every business serious about maintaining optimum cash flow, it is imperative that effective practices be implemented for securing monies owed and curtailing potential debtors. The past several years have seen some troublesome statistics materialize with respect to business debt collections. The statistics are particularly upsetting for small and medium-sized businesses trying to collect on their invoices.

The likelihood of successful debt recovery is increased dramatically when the process is outsourced to a reputable, third-party receivables management firm. In fact, today, it is estimated that over 90% of big businesses and approximately 10% of small businesses rely on professional debt collection agencies, with middle-market businesses falling in the middle. These companies are already benefiting from third-party intervention.

Burt & Associates offers our clients:

• Commitment to high standards as evidenced by membership in key industry associations including the Commercial Law League of America (CLLA) and the Commercial Collection Agency Association (CCAA).

• Qualified professional and longstanding staff members.

• Broad and strategically situated geographic coverage (i.e., in the United States, Europe, Asia, etc.)

• Credit management services (call center, asset location and skip tracing, etc.).

• State-of-the-art technology including a secure wide area network, sophisticated voice, data, and video-conferencing systems to facilitate optimum communications.

• Effective reporting via a 24/7 Web-based system.

• A proven track record serving businesses in diverse industries ranging from manufacturing and distribution to telecommunications, professional firms and education.

Burt & Associates can effectively manage your accounts receiveable. Please do not hesitate to contact your National Account Executive today.

With warmest regards,

Jerry Curtis
President & CEO

Educational Tidbits For Today’s Credit Executive
Knowing Your Burn Rate

Burn rate is often confused with the total amount of cash a company spends regardless of income. This is not quite accurate. A company’s burn rate is the NET amount of cash it burns through in a given period. For example, if a company starts out the year with $5 million in the bank and ends the year with $4 million, its burn rate is $1 million annually. Many investors confuse this with the total amount of cash a company spends on basic expenses such as salaries, rent, travel, etc.

The Credit Manager’s Q&A Corner

QUESTION: Explain how debt-collection efforts by creditors are affected when a debtor files for bankruptcy protection.

ANSWER: When a debtor files for bankruptcy, whether it be under Chapter 7, 11, or 13, and whether it be a voluntary filing or involuntary filing, “all entities” are automatically and immediately stayed from taking any action or continuing any legal action against the debtor. This includes attempts to collect debt from the debtor by any party. This also applies to the enforcement of liens against the debtor’s property. This stay also relates to repossessions of property. If the creditor had repossessed property prior to the filing of the case but had disposed of it by sale, the creditor could, and the key word here is “could”, be required to make restitution of that asset to the bankruptcy estate.