Tag Archives: Business

Not all Debtors are created equal!

27 Feb
After being in the ARM (accounts receivable management) industry now for many years, I can honestly say I’ve heard almost every story in the book from CEOs, CFOs, healthcare administrators, doctors, dentists, lawyers, accountants, billing managers to janitors as the reasoning or excuses from clients as to why their outstanding balance had not been paid.
Here are some common excuses:
  • They have been traveling.
  • They just lost their job.
  • They just moved and were not getting the invoices.
  • They came across financial hardships and needed some extra time.
  • They just had surgery and have been in the hospital so needed some time to get their things organized.
  • They weren’t satisfied with the service or product so didn’t feel the need to pay for it.
  • They were used to paying all their vendors after 60 or 90 days.
Here are some off-the-wall responses:
  • They said they were going to get their checkbook from their car and never returned.
  • They didn’t remember ever ordering that product or service.
  • They’re going through a divorce and to call the soon to be ex-spouse who is responsible for the balance, not them.
  • They were wondering if their creditor would be willing to barter instead.
It might seem odd to hear even the common excuses listed above if you aren’t in a business that extends credit or if you are in general a good paying consumer.
It may even seem like an episode from a spin off series of the Twilight Zone where customers walk into Costco, load their shopping carts full of items, walk past the cash registers, give the friendly greeters their mailing address to send them a bill and walk right out.  Luckily for Costco, it isn’t the case as they don’t extend credit (only through a 3rd party financing credit card partner).  Unfortunately for millions of other businesses around the world that essentially happens every day.
In my opinion the most vital thing to understand if you are in a business that extends credit or carries an accounts receivable is:
I explain to my clients that they’re only going to have to deal with 4 types of payers.  I laughed the other day when a client told me that 4 payers is 3 more than he’d care to deal with.  Can you blame him?
Here are the 4 Payer Types:
  1. Dutiful  (Always pays their bills on time, probably has an 800 or higher credit score.)
  2. Distracted (That busy working professional who is good for the money but hasn’t yet gotten to all 10-12 monthly bills on their kitchen table.  They simply need a reminder text, email, phone call, letter and they’ll pay up.)
  3. Disrespectful (Has disregarded and ignored at least 2 billing cycles from the same creditor and hasn’t called to explain or apologize about non-payment.  Are paying some bills more timely, but they have chosen which bills to put off that don’t seem so urgent.)
  4. Deliberate (Have expressed to their creditor verbally that they will not pay the balance owed or expressed through non verbal cues of long periods of silence, mail returns and disconnected phone lines.  These are the most high risk debtors.)
Now be honest with yourself, which category do you fall under?
I want to note that, in my experience, these 4 payers types are found in all socio-economic income levels, meaning some wealthy people fall into the category of Deliberate high risk debtors while people from low income levels can be in the category of Dutiful payers.
I won’t get to into details about the psychology of why these 4 types of payers/debtors respond, react or do nothing in this article.  What I can tell you is by simply understanding that there are 4 payer types and that not all debtors are created equal puts you FAR ahead of the game and your competition.
The BILLION DOLLAR question is how do I efficiently and professionally address each of the 4 payer types to recover my past due balances? (That is if you’re in a business that extends credit, if you don’t have to worry about this then lucky you!!)
I would love to hear your comments, create some dialogue around the 4 payer types and hear your ideas on how your business effectively maximizes your accounts receivable in-house.

Cyber Security and Debt Collection

20 Nov

Did you know that employees account for 43 percent of data loss, whether intentional or accidental? The remaining data breaches occur because of criminal infiltration. Regardless of the threat, our research shows that data loss and security breaches cost companies an average of $4 million in 2016, during which more than four billion pieces of confidential data were exposed.

Unfortunately, failing to create an effective cyber security system for your data collection efforts could put your customers and your company at risk.

Risks Associated With Cyber Security and Debt Collection

Data is easier to steal than you think.

Debt collection records are particularly sensitive because they contain significant financial information. The sensitivity elevates if you’re in the healthcare industry because your data might include personal health information (PHI).

Since you must report data breaches, your company’s reputation can take a serious hit if your customers’ data becomes compromised. Additionally, you could face serious consequences with regard to your cash flow, accounts receivable management, and stakeholders.

A data breach involving debt collection records could result in a serious fine from a regulatory body. Back in 2012, for instance, an auto dealership and a debt collector had to reach a settlement with the Federal Trade Commission (FTC) over data breaches that took place because of peer-to-peer file sharing.

Unfortunately, data breaches are on the rise. Our research reveals that 2016 saw nearly 40 percent more data breaches than 2015, and 94 of those breaches exposed at least a million confidential records each. Consumers value their privacy. In 2016, more than 15 million American consumers suffered from some sort of identity theft.

Cyber Security Solutions for Debt Collection

Getting best-in-class security for your data can help prevent breaches and other cyber security issues.

Many businesses don’t have the infrastructure necessary to meet HIPAA, NIST, FISMA, and PCI-DSS guidelines. That’s why working with a well-equipped collection agency can become a major asset.

Established collection agencies that secure their data against breaches can help protect your company from lawsuits, fines, reputation hits, and other consequences of a data breach. When you’re looking for a collection agency to handle your accounts receivable, make sure the candidate you choose follows these guidelines:

  • Data protection for data while it’s at rest, in processing, and in transit
  • Secure data center with 100 percent uptime
  • Redundancies in place to preserve data
  • Employees who are experts in specific data security areas, such as HIPAA, depending on your industry

Furthermore, you want to work with a debt collection agency that views security as a priority. As hackers and other criminals find new ways to skim data from victims, debt collectors must keep up with those attempts and find new ways to prevent intrusion.

You also want to make sure that your data is physically safe. Data centers should be equipped to prevent physical intrusion, fire and flood damage, and other catastrophes.

At TSI, our service portfolio is compliant with NIST, FISMA, PCI-DSS, and HIPAA. We employ security specialists with years of experience and expertise in protecting data against loss and corruption. If you’re looking for a debt collection agency to not only promote healthy cash flow and collect outstanding payments but also to preserve your data, we’re here for you. Contact me now to start optimizing your revenue.


Don’t Miss This Great Business Tax Credit

1 Feb

In 2104, Congress approved a tax credit for businesses as a part of the Affordable Care Act.  Don’t miss out on this tax credit that could save employers thousands, tens of thousands, and even hundreds of thousands each year.


9 Dec

Are you a small to mid-sized business or practice who needs fast cash to use as working capital?

Getting the money you need for your company has never been easier.  If you need $25,000 – $1,000,000, we can offer a high-quality alternative to banks.  Traditional bank loans can be sluggish, and often deserving small businesses get turned down.  That’s why we have set up a no-hassle application process to make access to working capital simple for business owners like you.

  • All credit histories considered (no minimum FICO score)
  • No complicated paperwork
  • Quick approval times (24-48 hours and even same-day)
  • Transparent Rates and Fees

Unlike banks, we don’t require a formal business plan or collateral.  If you answer yes to the following questions, you are eligible:

  1. Do you have bank statements for the past 6 months?
  2. Have you been in business for the last one year?
  3. Do you have $25,000 in gross sales per month?

In just a few easy steps, you can be on your way to a renovated facility, state-of-the-art technology, marketing and advertising campaigns that get the customers coming through your door, or any other business expense.

Don’t wait.  Call today at 770-783-9523 or 888-780-1333 to get your application started.

Cash Flow Strategies, Inc.




16 Jun

I was told today by a doctor that he refrains from pushing too hard to collect from a patient who owes him money, because of all the money he makes on the patient from insurance companies.  He is willing to write off patient balances, to keep making insurance money from the patient visits, and doesn’t want to offend the patient into leaving the practice by insisting he pay his bill.

This is the general attitude many doctors had 25-30 years ago.  It may have had some validity back them but times have changed!  Insurance money alone will not keep your doors open and your lights on any more doc.  You are putting your practice in jeopardy by not seeing what is happening around you!

High deductible health plans are the norm these days, and co-insurance is rising all the time.  Despite what the government tells us, there are more and more patients who do not have insurance, or have adequate insurance.  Self pay is now the highest payer in the medical world behind Medicare and Medicaid, and it is catching up fast.  According to recent statistics, patient balances now represent over 35% of a doctors income and soon, if major changes aren’t made, will be over 50%.

You can’t wish it away, or ignore it away.  You MUST find a way to motivate patients to pay you, and pay you faster than before.

Medicine, whether you like or not, or understand it or not, is a business.  You are trading a service for money, and the patient knows it.  They also know when you are leaving them alone about their bill so that you can continue to collect insurance money. Not only do they know, but guess who they tell?  EVERYBODY!!!  And guess what happens?  You get all the patients who don’t want to pay their bills.  Great!  Until, that is, until you watch your patient A/R go through the roof.  By the time you see this happen, you are already in trouble.

Don’t waste time.  There are automated tools to help your practice both maintain your good relationships with your patients, AND get them to pay you their portion of the bill sooner.  Call me today at 888-780-1333 and I will tell you about them.  Isn’t it worth 20-30 minutes of your time to keep the lights on in your practice over the long haul?

Is It Time To Dismount?

5 May

My father was a wise man. He used to tell me, “If you find out that your horse has died, it is a good idea to dismount.”

I’ve found, in my experience, that many medical and dental practices are riding a dead horse, and it is definitely time to dismount.

How many things in your practice are being done the same way they were 20 years ago? 10 years? 5 years? If you are like most practices, your answer will be “nothing!” But, if you think about it, the one thing that is being done the same way it has been for a long time is the way you collect money from patients and insurance companies that owe you money.

Sending a monthly statement, and calling (when you get the time to do so) does not work any more to motivate your slow pay and delinquent patients to pay your bill. Calling, waiting on hold, and nagging insurance companies doesn’t get you paid on time either. And do you have any idea how much having employees on hold that long will cost you in a month?

Over the years, we have determined that there are four distinct types of patient payers. Each one requires a different approach to motivate them to pay you, and it is a mistake to treat all of them the same. It is hard, if not impossible, for you to determine which is which quickly and inexpensively in-house.

We have also found a much more economical and effective way to motivate the insurance companies who are dragging their feet, making excuses, and ignoring your calls to get you paid faster.

Transworld Systems can help you update and automate your A/R processes for both insurance and patients. The cost will normally be less than what you are paying now to do what you do in-house, and the results will be MUCH better than riding a “dead horse.”

Contact David Wiener at 888-780-1333 or email me at david.wiener@transworldsystems.com

A Warning You Need to Read: Don’t Believe in Something For Nothing!

14 Jan

Many businesses have been told by their collection agency that they can provide free collections to them simply by adding the percentage fee onto the debtor’s balance as “the cost of collections”  In other words, promising prospective customers “something for nothing.”  With the high cost of collection agencies, this is a very tempting offer for a business who needs to collect their money and hesitates at paying an agency their typical 30-50% fee for collecting.


First of all, the match doesn’t work anyway.  If the fee is 50% and the agency or the client adds the 50% back into the bill before it is collected, the client will only receive 50% of the new balance, which is not the full amount (only 75% of the original bill)

More importantly than that, the agency is tempting you to violate Federal Laws against usury.  The agency is setting themselves, AND POTENTIALLY YOU, up for a law suit and stiff fines and penalties.  Even if you put a statement to that effect into your financial policy, you may not charge these percentages to recoup your collection fees.

Please take a moment to read this article, copied from the ACA International (American Collector’s Association) website about a recent court case against such an unscrupulous agency.

Court Rules Against Collecting Percentage-Based Fees

Eleventh Circuit Court of Appeals ruled that charging consumers a percentage
of their account balance as a collection fee is a violation of the FDCPA unless
the consumer explicitly agreed to pay a percentage-based fee.

In a Jan. 2, 2014, ruling, the Eleventh Circuit Court of Appeals found that a collection
agency may not collect a fee based on a percentage of the account balance if the
original contract between the consumer and creditor did not specify the consumer
would be responsible for a percentage-based fee.

In the case, Bradley v. Franklin Collection Service Inc., the consumer plaintiff had
signed a patient agreement when receiving medical treatment that stated, “In the
event of nonpayment… I agree to pay all costs of collection, including a reasonable
attorney’s fee…” The creditor subsequently added a 33-1/3 percent fee (reflecting
the contractually agreed upon fee between the creditor and the collection agency)
before forwarding the account to the collection agency.

The court ruled that the plaintiff, “agreed to pay the actual costs of collection; his
contractual agreement with [creditor] did not require him to pay a collection agency’s
percentage-based fee where that fee did not correlate to the costs of collection.”
The court found that the percentage-based fee, assessed before the collection
agency’s attempt to collect, was not related to the agency’s actual cost of collection,
thus breaching the agreement between the consumer and the creditor. Therefore,
the court held that the collection agency violated the FDCPA by collecting the 33-1/3
percent fee when the consumer only agreed to pay the actual costs of collection.

© 2014 ACA International

In other cases, medical practices, along with the agency, were charged under racketeering laws for the very same offense.  The fines and penalties that they were required to pay were astronomical.

Please, let me show you a way to avoid the percentages charged by these collection agencies, without running afoul of the law, and while collecting more money than they do in the process.

Respond to me through the form below and I will rush you the information on how to avoid these kinds of unscrupulous methods and still collect more of your hard earned money.

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