Commercial Collections Blog

Following are some internal company situations that can actually cause customers not to pay in a timely manner. The most important problem is a corporate culture that accepts slow payments as a fact of business life. Poor management can result in late payments if managers are reluctant to ask for money and pass that attitude down to staff members. Also, everyone will suffer if there is a lack of clear and purposeful company policies. Also, staff without the right people skills to build relationships will likely be unable to listen and empathize with a customer while at the same negotiate forcefully according to the rules of the game–that payment is due. For Commercial Collections visit our complete solution from information on how you can establish a good credit policy to accounts receivable management.

Technorati Tags Bad Debt, business credit, Debt Collection

Wine the older gets the better it is, this doesn’t apply on any debt. When someone owes you money, for any service or product offered by you or company, you just simply ask for it. In an ideal world this just simply works, but not in real world, there always is going to be slow paying customers, is better to get use to it or you may have to get out of business. for any advice in How to Collect a Debt contact us.

Credit Policy

As a business owner, it is up to you to protect you money. Most companies by experience, may suggest for you to check your policy that any new customer wishing credit must submit references, and be precautious if any new customer wants credit intermediately, or any suspicious report from unknown references from the applicant, may be poor credit record on his own. As a rule of thumb, treat your customers request for credit as your vendors treat you, will put you in a wise credit policy on hands.

Invoice Cycle

The first line of defense against late payment is a full complete invoice. Invoices must be accurate, detailed and easily understood. If it is difficult to understand, then they need to request additional information. Means “has been added to their to-do list”, which increases the collection period.
And be sure that whenever a sale on credit, you immediately send an invoice. It is a wise policy to ensure that never perform any service or shipped any goods without invoice enclosed. In fact, send a duplicate so many customers useful to have two copies, one for their records and other to send with the payment. For more information on invoice cycle, read Commercial Accounts don’t pay on time

Past Due Accounts

• Once payment is late, send a copy of the invoice to the client with a statement advising their checks.
• When you send the statement, mark the overdue invoices.
• Small changes like:  handwritten note on a statement or invoice is more effective than printed messages or team in the past for stamps and stickers.
• Call your client asks for how long you can wait for payment
• Tell your customer that you have some large bills coming due, and you will appreciate a check. This technique can be effective if not used too often.

Any one can implement this easy steps, but like we say “In real World”,  debt collection can be a stressful process, if none of this suggestions works, please contact a Debt Collection Agency for any help on your past due accounts receivables.

Technorati Tags collection debt, Debt Collection

Effective collections begin with organization. This doesn’t necessarily mean just knowing who The debtor is and how much they owe. It also means gathering all the necessary information available to you that will answer a number of questions PRIOR to you picking up the phone and calling the debtor. As an example, it is not only good to know who is the responsible party for paying your invoice but what is the best day to call that person and what time of day is best to catch him/her in the office. This information should be reflected in the debtor’s file, which you should have obtained when asking that very question on the credit application the debtor completed before doing business with your firm. “Who is the responsible party for getting invoices paid?” “What is the best day/time to contact this individual?” Having the correct phone number (and extension) also should be in the credit application. Once you have this information, review any prior calls made. Note any commitments or comments. For more help call the Debt Collection Agency, Burt and Associates.
If your are interested in our interactive chart for Business Debt Recovery, we can point you to the right direction.

Technorati Tags commercial collection tips, Debt Collection

The term inventory turnover goes by a number of names like inventory turns, stock turns, stock turnover, depending on which part of the world you live in. But the basic premise of the concept remains the same: to find out how many times the inventory ‘turns over’ within a specified period. The specified period is a year. Turning over means how many times the inventory comes into the warehouse of the business and leaves it for the process of production. The inventory turnover ratio is calculated with the inventory turnover formula in days which supplies the details regarding the stock turnover.

If the inventory turnover ratio is high, which means that your inventory policy involves buying more times over a period and consuming, there are a chain of events associated. Purchasing inventory involves two other costs other than the cost of purchase itself: the cost of holding the inventory (warehousing) and the cost of delivery. So if you buy less inventory, more times a year, then you incur a higher delivery cost for the period, because you have to go fetch the stuff a lot more times. At the same time, you need not have a pretty big warehouse and hence that cost is lower. Thirdly, having a low inventory means reduced risk of spoilage and wastage and that lesser company money is locked up in the inventory.

The formula for Inventory Turnover

Inventory Turnover = Total Cost of Goods Sold / Average Inventory

The formula for Average Inventory

Average Inventory = ( Inventory “beginning” + Inventory “ending” ) / 2

The formula for Average Days to Sell

Average Days to Sell = 365 days / Inventory Turnover Ratio

Purchasing more inventory means reduced aggregate delivery cost since the shipment perhaps comes only once or twice a year. Warehousing costs will be higher because there is a lot more stuff to store and hence needs a lot more space. And while there are chances of losses due to spoilage and the money is locked up in the inventory, this can be compensated for by the benefits of economies of scale.

So the desired level of inventory turnover really depends on the company policies. If the business uses a bulk of foreign made raw materials in its production, it makes little sense to order a tiny shipment every week or month. Then again, if the raw materials are like to be spoiled, then there is no option trying to store them for a longer time. The DSO and other ratios are key to understanding financial statements. Our relationship spreadsheets reduce time and effort in the calculation of coefficients of the decision-making. Reduce the risk to lenders and investors and enable owners, managers and consultants to increase productivity and corporate profits. These spread-sheets are low prices that provide a huge return on investment. Burt and Associates, the debt collection agency, can help you keep your inventory under control.

Technorati Tags burt and associates, Debt Collection, inventory turnover

­A recession is a prolonged period of time when a nation’s economy is slowing down, or contracting. Such a slow-down is characterized by a number of different trends, including:

• People buying less stuff
• Decrease in factory production
• Growing unemploymen
• Slump in personal income
• An unhealthy stock market

By the conventional definition, this slow-down has to continue for at least six months to be considered a recession.

This definition really raises more questions than it answers. What does it mean for the economy to slow down? Why does this happen? How are all these factors related? And what exactly is “the economy”?

People talk about the U.S. economy as an independent entity, but it is actually the result of millions of people’s actions. Economists use all kinds of esoteric terms to describe the connection between people’s actions and the economy as a whole. But you can understand the basic idea of this connection by looking at only a few basic concepts: producers, consumers, markets, supply and demand and all of this causes bad debt, Burt and Associates can help you call today 1-877-740-7839

Technorati Tags BUSINESS BAD DEBT, collection agency, Debt Collection

Many times, slow payment by customers is a result of the way a company extends credit, so it’s important to be aware of ways that poor credit policy can end up exacerbating unpaid bad debt customer balances. Following are some internal company situations that can actually cause customers not to pay in a timely manner. The most important thing is the bad debt culture that accepts slow payments as a fact of business credit. Bad debt can result in late payments if managers are reluctant to ask for money and pass that attitude down to staff members. Also, everyone will suffer if there is a lack of clear and purposeful company policies. Finally, staff without the right commercial collection skills to build relationships will likely be unable to listen and empathize with a customer while at the same negotiate forcefully according to the rules of the game–that payment is due not let it become past due and become bad debt.

Technorati Tags Commercial Collection, commercial debt, Debt Collection

Perhaps you’re not especially enamored of your banker right now. About 70 percent of banks recently tightened their standards on loans to companies with less than $50 million in annual sales, according to a survey by the Federal Reserve, and more than 40 percent of the banks reported reducing credit lines for their small-business customers making Bankers out of small business and having to collect commercial accounts. Unfortunately, no business can afford a rift with its banker — especially in tough times like these. In fact, this is precisely the time to give your lender some special attention. “If you work on building a relationship, then, in the event that there is a bump in the road, you can approach it from a position of familiarity and understanding.

Technorati Tags Debt Collection, Debt Recovery

Do Inquiries Affect My Credit Report?

Any time you apply for credit, a lender will review your credit report and other information to determine your credit score. They use your credit score to decide whether or not to approve you for a loan, at what rate and for what amount. A number of things can affect your business credit report, including inquiries. The type of inquiry determines whether or not it affects your credit history.

Inquiries That Won’t Affect Your Credit Report

Pre-approved credit offers, employer inquiries and self inquiries do not affect your credit history.

Inquiries That Affect Your Credit Report

Inquiries related to home or car loans and credit cards will affect your credit score. Typically, for each pull, you can expect to see your credit score decrease by about 5 points (on a credit score scale ranging from 330 to 850). One or two inquiries aren’t enough to significantly lower your score; however, it’s still smart to use discretion when applying for loans.

Rate Shopping

When you shop around for the best rate on a credit card  or loan, you will incur inquiries with each request. However,research has shown that if your rate shopping all occurs within 30 days, the inquiries won’t affect your credit score the same way.

Other Factors

More important factors that can significantly affect your credit history include your payment history, employment status, amount of debt and amount of credit. Other factors of the debt itself you can find it in How to Collect a Debt for business owners is valuable information

Technorati Tags business credit, Debt Collection

There are six main factors that contribute to successful leadership, including vision, motivation, strategy, faith, values and responsibilities. Vision is a picture of the future that a leader wants to achieve, while motivation involves getting commitments from others to share that vision. Leaders must outline a strategy to achieve their visions and have a firm faith that they can overcome obstacles in reaching their goals. Values, with moral values coming ahead of economic ones, are important in debt collection business.

Technorati Tags Commercial Collection, Debt Collection

Everyone is familiar with the expression “the squeaky wheel gets the grease.” This is perhaps the most important truism in the world of debt collection.

In the current economic climate, nearly all businesses are experiencing cash flow issues. The frozen credit market has yet to thaw making it even more difficult for small and medium-sized businesses to stay afloat.
As more and more companies find their funds stretched to the limit, they begin to prioritize where the little they have goes. In this situation most businesses will behave like the average consumer and pay the most necessary bills first often letting those they deem less important to slide.

How do you move your invoice from the “less important” to the “most necessary” pile? You have to somehow put your company in the front of your customer’s mind and debt collection calls and/or letters will be added to your staff’s responsibilities.

However, choosing to handle debt collection in-house can be problematic. Chances are your staff will postpone making collections call as long as they can. As the days turn into weeks and the weeks into months, your invoice(s) get buried beneath the avalanche caused by your customer’s cash flow problems.

Adding a debt collection specialist to your staff is not a very cost-effective or efficient answer. It takes time and money you don’t have to bring in and pay someone whose only duty would be to send letter and make debt collection calls.

The best option is to take your past due accounts to a professional debt collection agency.

A reputable debt collection agency will not charge an upfront fee, but will work on a contingency basis taking a percentage (usually 10-20%) of what they actually collect for you.

The best debt collection agencies will have an experienced staff and a plan of action to collect on your past due accounts. Their agents will be well-trained in methods and strategies designed to collect your money in the most effective and efficient manner.

Hiring any new employee can be a challenge. Resumes that have been enhanced or candidates who interview far better than they perform can put you into a cycle of hiring, training, firing, and hiring again, especially if you are trying to fill a position in an area you might not be as well-versed in.

A professional debt collection agency will have supervisors who know the business inside and out. This knowledge helps them identify, screen, and hire those who would be most successful.

There are a number of state and federal laws that address how debt collection activity must be conducted. Failing to adhere to these regulations can lead to your customer filing suit against you. A lost lawsuit will add insult to injury as you will likely have to pay a fine and/or restitution on top of not getting paid what your customer owed.

It can be quite a challenge to keep up with all of the legal aspects of debt collection. However, a professional debt collection agency will be up to date on the current regulations as well as aware of any changes resulting from new legislation or court precedent.

Cash flow problems are rampant in today’s economy. Consequently, most business owners are content to let sleeping dogs lie. Meanwhile, your own cash flow issues are worsened as your DSO increases.

However, by placing your past due accounts with a professional debt collection agency you insure a constant and consistent level of communication with your past due customers. Congratulations! You have just become the squeaky wheel!

Technorati Tags collection agency, Commercial Collection Agency, Debt Collection