Commercial Collections Blog

The accounts receivable aging schedule is a useful tool for analyzing the makeup of your accounts receivable balance. Analyzing the schedule allows you to spot problems in accounts receivable early enough to protect your business from major cash-flow problems.

The aging schedule can be used to identify the customers that are extending the time it takes for you to collect your accounts receivable. If the bulk of the overdue amount in receivables is attributable to one customer, then steps can be taken to see that this customer’s account is collected promptly. If overdue amounts stem from a number of customers, that could be a signal that your business needs to tighten its credit policy toward new and existing customers.

The accounts receivables aging schedule also identifies any recent changes in the accounts making up your total accounts receivable balance. Almost every business has to deal with customers that are slow to pay, and you should expect the same for your business. However, if the makeup of your accounts receivable changes, when compared to the previous month, you should be able to spot the change instantly. Is the change the result of a change in your credit policy? Was the change in accounts receivable caused by some sort of billing problem? What effect will this change in accounts receivable have on next month’s cash inflows? The accounts receivable aging schedule can help you spot these problems in accounts receivable and provide the necessary answers early enough to protect your business from cash-flow problems.

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The first month of the year is almost over but it isn’t too late to make a fresh new start to clean up your outstanding A/R.
The more delinquent your accounts become, the less collectible they are. At ninety days delinquent, your accounts start depreciating faster. By six months delinquent, they have depreciated so much, that only thirty (30%) percent of your money may be collected. Data from the US Department Of Commerce. This rapid loss in value is called Accounts Receivable Depreciation.

Accounts Receivable Depreciation is a silent destroyer of the profit margins of most businesses. The key to any type of successful collections, be it in-house or third party, is tightening and shortening the process, then forwarding the account out to the collection agency before 60 days. If you choose to wait longer you are depreciating most of your chance of ever getting your money. A common mistake most businesses make is to wait over 6 months to use a collection agency. They do this because they don’t want to pay a high percentage or damage their hard earned reputation. Start early, recover more is what accounts receivable management is all about.

Contact your National Sales Representative today to greatly minimize your accounts receivable depreciation. As always, Burt & Associates is here to serve our clients. We are an SAS-70 Type II certified commercial collection agency. Please call us today to get your accounts receivable managed and collected. Best Regards,

Best Regards,

Jerry Curtis
President & CEO
Commercial Collection Agency

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TAX SEASON 2009′ IS UNDERWAY

Current tax law allows corporations to obtain a Quick Refund from the IRS when they overpay estimated tax during the year.
However, no Quick Refund procedure exists for individuals who operate their businesses as limited liability companies, S corporations, partnerships or sole proprietorships. Taxes for these businesses are paid directly by the individual owners. Only businesses that pay tax at a corporate level, “C corporations,” currently benefit from this Quick Refund procedure.

This year the IRS and it’s partners are offering a new option, Free FIle Fillable Tax Forms, that opens up Free File to virtually everyone, even those whose incomes exceed $56,000.

Since Jan. 1, 2009 corporations have been able to file a Form 4466 to recover their estimates of 2008 overpaid taxes. They can do this now, even though they may not file their tax returns until September 2009. In light of the current economic downturn, Quick Refunds will bring some critically needed funds into the economy, yet billions of dollars more could be infused if individuals were allowed the same opportunity.

www.webcpa.com

Quote of the week: “It is not how much you make that counts but how much money you keep.”
-Robert T. Kiyosaki
Author of “Rich Dad, Poor Dad”

Educational Tidbits For Today’s Credit Executive

Tax Liens: Often the Beginning of the End

Tax liens are often the most misunderstood liability a company can face. Nevertheless, understanding tax liens and the effect they can have on a company is imperative. While there are all forms of liens, the state tax liensand federal tax liens often can be the most damaging, particularly the latter. When an employer withholds taxes and does not reimburse the federal government, it could be the beginning of the end for many businesses. The reasons why companies fail to pay their government taxes that result in liens being placed against them are varied. The outcome, however, is almost always certainly not a positive one.

The Credit Manager’s Q&A Corner

QUESTION: Explain who the fee examiner in a bankruptcy Case is.

ANSWER: The fee examiner is the person appointed by the court to monitor fees paid to professionals in bankruptcy cases.

Technorati Tags ACCOUNTS RECEIVABLES

Almost any small business can use advice on how to improve its collection cycle. The first line of defense against late payments is a complete invoice. Your bills should be accurate, detailed and easy to understand. If difficult to understand, then your client will need to call for additional information. That translates into “you have been added to their to-do list,” which increases the time of your collection cycle. Ensure important information is included on your invoices, ie, address, contact person, and that amounts are broken down clearly and the due date is easy to locate on the invoice.  Once generated, send the invoices promptly. Remember, the longer you take to bill a customer the less likely you are to receive payment for the goods and services provided.  You want to ensure you are billing your customers consistently and effectively.  As yourself the following questions regarding your current bookkeeping practices:

Are you tracking overdue accounts and taking consistent action to collect past due accounts? Do you have an effective tool in place to track when an account comes due, and knowing who has paid their bills and who has not? When a customer’s invoice goes past its due date, is there a procedure in place to follow-up with that customer?

Is your average accounts receivable collection period in line with the company’s credit policy? If your credit terms provide your customers with 30 days to pay their bills, then you should expect that your average collection period will be somewhere around 30 days, or perhaps a little longer.

By answering these questions and then defining solid accounting procedures, you’ll soon be implementing a fine-tuned collection process.

Fore more information visit Accounts Receivables Management.

Technorati Tags ACCOUNTS RECEIVABLES

Business  deductions, whether valid are  invalid, can be a nightmare to those who deal with commercial  accounts receivables. Often such deductions as discounts , pricing and even sales tax can sit on an A/R ledger for long periods of time until they are either credited or paid back by the business customer. There are dozens of different kinds of deductions that customers take. In fact, numerous surveys have shown that more than 80% of the time deductions are valid and should be credited promptly. Some companies have systems in place that allow for a quick resolution of these items, yet in other firms (and it often varies by industry not necessarily business to business ) deductions can sit on a company’s books for as long as six months or more. The result? Inflated accounts receivables that in the long run can cost your company money. If a company’s credit line is, even in part, tied to it’s a/R, then the inflation of this current asset could adversely affect the amount that company can draw against–a thought to consider when evaluating your overall A/R status.

Technorati Tags ACCOUNTS RECEIVABLES

Customer deductions, whether vaild or invalid, can be a nightmare to those who deal with accounts receivables. Often such deductions as freight, pricing and even sales tax can sit on an AR ledger for long periods of time until they are either credited or paid back by the customer. There are dozens of different kinds of deductions that customers take. In fact, numerous surveys have shown that more than 80% of the time deductions are valid and should be credited promptly. Some companies have systems in place that allow for a quick resolution of these items, yet in other firms (and it often varies by industry not necessarily firm-to-firm) deductions can sit on a company’s books for as long as six months or more. The result?  Inflated receivables that in the long run can cost your company money. If a company’s credit line is, even in part, tied to its AR, then the inflation of this current asset could adversely affect the amount that company can draw against–a thought to consider when evaluating your overall AR status.

Technorati Tags ACCOUNTS RECEIVABLES

With another month gone, the cold weather is fast approaching, and so is the end of the year. At the end of the year you will not want to be left with remaining outstanding receivables, you will want them collected. Give the professionals at Burt and Associates a call and we will get those receivable collected before the holidays arrive.

Burt & Associates is a SAS-70 Type II certified and compliant Commercial Collection Agency. Please give me a call today to get us working for you.

Regards,

Jerry Curtis
President & CEO

Educational Tidbits For Today’s Credit Executive

A Few Ways to Protect Your Company’s Trade Receivables

In these uncertain economic times, it has never been more important to protect your company’s assets. One of those assets is trade receivables. Whether growing your firm internationally or just protecting your AR, there are a number of ways to make certain those receivables are handled efficiently. Irrevocable or even standby letters of credit certainly are a few ways to reduce the chances of not getting paid according to terms. Making certain your collection practices, and that means followup policies, are carried out in a timely manner certainly will reduce your company’s DSO. Obtaining credit insurance is a great way to protect your receivables as well. And of course, developing a sound relationship with a bonded and reliable third-party collection service is almost a necessity in today’s economic times.

The Credit Manager’s Q&A Corner

QUESTION: Explain the first creditors’ meeting in a bankruptcy case as a discovery device.

ANSWER: After a company files for bankruptcy protection, the first chance that creditors get to ask questions of the debtor under oath is at the creditors’ 341 meeting. This meeting takes place between twenty and forty days after the filing and the debtor’s presence at the meeting is mandatory. Creditors then have wide scope for asking questions, which can be about the debtor’s assets and liabilities or any issue that could affect the administration of the estate or other matters.

Technorati Tags ACCOUNTS RECEIVABLES

With another month gone, the cold weather is fast approaching, and so is the end of the year. when the financial finance and accounting, the bad debt is the portion of receivables that can not be collected, usually from accounts receivable or loans. At the end of the year you will not want to be left with remaining outstanding receivables, you will want them collected. Give the professionals at Burt and Associates a call and we will get those receivable collected before the holidays arrive.

Burt & Associates is a SAS-70 Type II certified and compliant Commercial Collection Agency. Please give me a call today to get us working for you.

Regards,

Jerry Curtis
President & CEO

WHAT’S HOT NOW!

The Motley Fool… www.fool.com Get their top 2 two stock tips now! To Educate, Amuse & Enrich.

Earn Your Green Certification – Business owners who want to make their companies environmentally friendly have numerous resources they can use.

Green Seal sets environmental standards for products such as paints, stains and coatings, paper towels and napkins, even residential cleaning services. Those products that succeed in reaching those standards are certified and listed on their Web site.

Energy Star is a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy to identify efficient products and practices. Its consultants examine the manufacturing and assembly process and use of components.

Is Your Bank Stable? Use the FDIC’s Bank Find page to locate the bank and then click to review your banks’ financial reports.

Educational Tidbits For Today’s Credit Executive

A Few Ways to Protect Your Company’s Trade Receivables

In these uncertain economic times, it has never been more important to protect your company’s assets. One of those assets is trade receivables. Whether growing your firm internationally or just protecting your AR, there are a number of ways to make certain those receivables are handled efficiently. Irrevocable or even standby letters of credit certainly are a few ways to reduce the chances of not getting paid according to terms. Making certain your collection practices, and that means followup policies, are carried out in a timely manner certainly will reduce your company’s DSO. Obtaining credit insurance is a great way to protect your receivables as well. And of course, developing a sound relationship with a bonded and reliable third-party collection service is almost a necessity in today’s economic times.

The Credit Manager’s Q&A Corner

QUESTION: Explain the first creditors’ meeting in a bankruptcy case as a discovery device.

ANSWER: After a company files for bankruptcy protection, the first chance that creditors get to ask questions of the debtor under oath is at the creditors’ 341 meeting. This meeting takes place between twenty and forty days after the filing and the debtor’s presence at the meeting is mandatory. Creditors then have wide scope for asking questions, which can be about the debtor’s assets and liabilities or any issue that could affect the administration of the estate or other matters.

Technorati Tags ACCOUNTS RECEIVABLES, Bad Debt

In a time when the economy is weak and every dollar counts, you need your outstanding receivables paid. Let the professionals at Burt & Associates collect those outstanding debts and get you the money you need.
Outstanding receivables cash conversion cycle is a Metric, which expresses the time in days it takes a company to convert natural resources into cash flows. In general, a company acquires a credit report, which will lead to passivity. The company may also sell products on credit, leading to claims. Cash, not until the company pays the debts and collect the claims
Burt & Associates is a SAS-70 Type II certified and compliant Commercial Collection Agency. Please give me a call today to get us working for you.

Regards,

Jerry Curtis
President & CEO

WHAT’S HOT NOW!

The Motley Fool… www.fool.com Get their top 2 two stock tips now! To Educate, Amuse & Enrich.

Earn Your Green Certification – Business owners who want to make their companies environmentally friendly have numerous resources they can use.

Green Seal sets environmental standards for products such as paints, stains and coatings, paper towels and napkins, even residential cleaning services. Those products that succeed in reaching those standards are certified and listed on their Web site.

Energy Star is a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy to identify efficient products and practices. Its consultants examine the manufacturing and assembly process and use of components.

Is Your Bank Stable? Use the FDIC’s Bank Find page to locate the bank and then click to review your banks’ financial reports.

Educational Tidbits For Today’s Credit Executive
Bankruptcies and Government Loans For the Big Three Carmakers?

The Big Three’s prospects are growing dimmer and dimmer as sinking sales, huge losses and dwindling cash threaten to drag Ford Motor Co., General Motors Corp. and Chrysler LLC into Chapter 11. While Ford and GM have repeatedly denied they are considering bankruptcy filings, their cash-burn rates, which are fast depleting their cash positions, are likely to continue at least into next year as they attempt to develop fuel-efficient vehicles for the North American market. Chrysler’s finances aren’t known as well since the privately-held company doesn’t release figures. Bankruptcy filings of the carmakers would mark a major shakeup of the U.S. landscape. The Big Three together employ 200,000 workers and provide pensions and healthcare to more than one million Americans. They also are the life blood of some 20,000 car dealers around the country and are a major source of business for a large number of automotive suppliers.

The doomsday scenario has led to talk of more government assistance. The federal government, which has already pledged $25 billion to help Ford, GM and Chrysler move toward fuel-efficient cars that will meet new mileage standards, may be called on again for financial help, after the elections in November. More federal dollars could go to propping up the automakers, possibly resulting in assistance for a potential GM/Chrysler merger or in partial government ownership of one or more of the companies.

The Credit Manager’s Q&A Corner

QUESTION: Explain the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005.

ANSWER: The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 is legislation that primarily affects consumer filings, making it more difficult for a person or estate to file for Chapter 7 bankruptcy. The BAPCPA impacts business filers as well, with the heaviest impact on smaller companies, i.e. those listing less than $2 million in debt. BAPCPA became effective just over three years ago.

Technorati Tags ACCOUNTS RECEIVABLES, cash flow