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Did You Open Your Business To Specialize in Collections?

8 May

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Entrepreneurs, specialists and CEO’s who operate companies did not open their respective businesses to collect on past due accounts. Each started their business to provide a good or service to fill a need. Often, there is not sufficient time, resources or understanding of the best way to collect on past due payments. Many wonder:

  • How soon after the first invoice do you send the next?
  • When do you call?
  • What do you say?
  • How do you protect the relationship you worked so hard to build?
  • Are there laws regarding collections?

As a result of unanswered questions, lack of processes and time, many debts go unpaid and ultimately factor into business failure. Company owners can lose traction while trying to split time between managing a shortfall of cash flow and collecting on past due payments while also attempting to concentrate on operating and growing their business. This is when companies should rely on the experts at collection agencies to recover delinquent accounts.

A company who must send their clients to collections no more wants to do so than the client wants their account sent. Unfortunately this step is sometimes necessary. When a business or company provides credit for goods or services they expect to, and should, receive payment. Multiply the effect of bad debts, late payments, slow paying and non paying client across thousands of businesses across the country and it is easy to see the negative impact this could have on the total economy.

A debt collection agency can assist in recovering debts and improving account receivables so business owners and operators can focus their energy and time on growing and running the business. Collection agencies possess the systems, resources and trained personal to improve cash flow. A good agency will have researched and studied consumer behavior and know the proper steps to take when dealing with the different types of debtors many companies and business encounter today.

When selecting a collection agency, make sure they are compliant with the varied and ever changing state and federal regulations that govern this highly-regulated industry. The wrong choice in a collection agency could result in large fines as a result of negligent actions with regard to state and federal regulations.

For more help in selecting the proper agency for you business, medical or dental practice, contact me.  I’m happy to help.

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Top 10 Tips To Improve Collections (Part 2)

7 May

It’s a problem faced by virtually every business and medical practice – how to deal with customers / patients who pay their bill late, or not at all.  While customers and patients expect prompt and professional service, they don’t always meet the same standard when it comes to paying their bill.

Accounts not paid promptly can severely impact the cash flow of a business or practice.  A clearly defined and carefully communicated, yet diplomatic payment policy, may help avoid difficult collections situations.

Tip #2

INVOICE PROMPTLY AND SEND STATEMENTS REGULARLY

If your business/practice doesn’t systematically invoice and bill, start now.  Many times bills aren’t paid simply because the customer/patient hasn’t been billed or reminded in a timely manner.  Monthly statements aren’t enough anymore.  Each customer/patient should be reminded at the least every two weeks.  The lack of accomplishing this often occurs in smaller or newer businesses or practices where there isn’t enough staff to handle the invoicing and billing properly.  If staffing or the cost of regular systematic, frequent follow-up is an issue in your case, help is available to get it done in a economical manner.  With our economy today, there is no replacement for getting this done one way or another.

Contact me if you would like information on ways to get this accomplished in your own situation.  The consultation is free.

To receive each of these 10 tips by email, please follow this blog by entering your email address on the right side of the page.

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Top 10 Tips To Improve Collections (Part 1)

6 May

It’s a problem faced by virtually every business and medical practice – how to deal with customers / patients who pay their bill late, or not at all.  While customers and patients expect prompt and professional service, they don’t always meet the same standard when it comes to paying their bill.

Accounts not paid promptly can severely impact the cash flow of a business or practice.  A clearly defined and carefully communicated, yet diplomatic payment policy, may help avoid difficult collections situations.

TIP #!

HAVE A DEFINED CREDIT POLICY

The first step is to clearly define when accounts are to be paid.  If customers/patients are not informed that accounts are to be paid on time, chances are they will pay them late, or sometimes not at all.  Make sure that your payment terms and expectations are clearly stated in writing to each person.

To receive each of these 10 tips by email, please follow this blog by entering your email address on the right side of the page.

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Eliminate the A/R Tug of War

5 May

 

Nobody wants to go to collections. Not the business owner and certainly not the customer.

When you own a business there are times when bills will go unpaid longer than 30 or 60 days. These delinquent payments can have a negative impact on your account receivables process and could result in your business to have financial setbacks. After all, if your customers are not paying, how do you expect to pay your bills?

Depending on your type of business, the time frame you decide when a payment is late could vary. Most businesses extend 30 day terms. As a business owner, how do you handle payments that are past due?

  • Calling the customer
  • Sending out notices
  • How much time are you spending out of your day attempting to recover the past due payments?

Many business owners feel they can recover the money while working to build their business and maintain a good relationship with their customers. The moment you stop trying to remind a customer of a late payment and start trying to collect on a debt is when you need to hire a professional collection agency.

The benefit of a professional collection service is that their team understands how to successfully collect the money that is owed to you. Recovery rates are higher than tackling the collection process yourself. Professional collection agencies should also understand the laws and regulations that govern the collection industry, and are 100% committed to compliance.

The thought of turning a customer over to collections can be difficult, especially if, like most business owners, you feel it is important to maintain a healthy and professional relationship with your customer. Make sure your collection agency values your client relationship as much as you do.

Your best option is to look for an agency that doesn’t charge percentages based on what is collected, can start the process early and economically, and who offers contact with customers or patients in your name first.

Contact me for some answers here.

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