Commercial Collections Blog

Discounts can be beneficial to both the seller and buyer under certain circumstances. One of the primary reasons for the seller to offer discounts for early payment are the relative financing costs of accounts receivable that are saved by the seller for early payment versus the cost of early settlement discounts. Another primary reason relates to the degree of the sellers needs for early payments due to the company’s cash flow requirements. Offering cash discounts for early payment however, has its down sides, such as noting that debtors have a tendency to take the discounts whether they qualify for them or not. Whether a collection department or commercial collection services try to Collect on these “unqualified” discount deductions can then become a headache and, if let go, eventually unnecessarily inflate receivables, which could cause borrowing rates to increase if overall deductions get out of hand.

Technorati Tags cash flow, Commercial Collection

With healthy cash flow essential to the financial success of any company, firms must be aware of alternative strategies in times of lean cash. One strategy that can be used, especially by smaller companies experiencing a cash crunch, is that of inventory-based credit. For example, some finance companies specialize in lending money based on inventory rather than receivables, assets and purchase orders, while others can provide a revolving credit line for owners of small businesses. The trade-off is that companies that need cash, while they’re waiting to get paid, have access to money to tide them over. In addition, accounts receivable financing is also an alternative as well as making certain your firm not only has a well-oiled collection policy in place but your past due accounts are referred to third party collection services in a timely manner. If you are looking for a commercial collection agency in Cleveland call (440) 941-6578

Technorati Tags cash flow, cash flow problems, Commercial Collection

Often intangible-asset valuation reports and related economic analysis are prepared as part of a corporate bankruptcy. Intangible-asset valuations often impinge on controversies concerning, among other things:

Valuation of financial assets is done using one or more of these types of models: (from Wikipedia)

1. Estimate of discounted cash flow to determine the value of future income they expect to have the assets, discounted to their present value. (Increase your cash flow, reduce your DSO,  Commercial Collection Agency)
2. The models to determine the relative value based on market prices for similar assets.
3. Certain types of financial assets provides options of pricing models (e.g., investments with embedded options such as a callable bond, put options, warrants, employee stock options, call options ) and is a model of the current complex value. The most common models of option pricing is the Black-Scholes-Merton and lattice models.

Technorati Tags bankruptcy, cash flow, Commercial Collection

Discounts can be beneficial to both the seller and buyer under certain circumstances. One of the primary reasons for the seller to offer discounts for early payment are the relative financing costs of accounts receivable that are saved by the seller for early payment versus the cost of early settlement discounts. Another primary reason relates to the degree of the sellers need for early payments due to the company’s cash flow requirements. Offering cash discounts for early payment however, has its down sides, such as noting that debtors have a tendency to take the discounts whether they qualify for them or not. Collecting on these “unqualified” discount deductions can then become a headache and, if let go, eventually unnecessarily inflate receivables, which could cause borrowing rates to increase if overall deductions get out of hand. Other topic you would like to know is the accounts receivables aging schedule, use one of our tools Business Debt Recovery Chart

Technorati Tags ACCOUNTS RECEIVABLES, cash flow, commercial collection agencies

In such threatened industries, cost-cutting has helped. Cost-cutting in the newspaper industry have actually succeeded in boosting its Ebitda, or earnings before interest, taxes, depreciation, and amortization, despite the advertising downturn. “What cost cuts do is buy companies more time to get through the downturn. According to a S&P’s Mar. 16 report on the corporate bond markets’ “weakest links,” the industries with the highest concentrations of troubled companies include media and entertainment; banks; chemicals, packaging and environmental services; consumer products; and forest products and building materials. A strong economic debt recovery could help business avoid losses in these industries. It is going very difficult to survive without a revival in [sales] and earnings growth.

Technorati Tags cash flow

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

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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.

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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