Commercial Collections: Business Finance Booster Shot
Commercial collections: fixture of the new B2B culture
If you're in the business-to-business field, or even if you're a consumer products business that works through third-party distribution channels, you probably know what it's like to check your mail anxiously each day, sifting through all the bills for that payment that was supposed to have been in months ago.
It wasn't supposed to be like this. If you were a good, honest businessperson who dealt with other good, honest businesspeople, "commercial collections" wasn't supposed to be part of your vocabulary.
Back in the good old days, an invoice or purchase order that had an established company listed in the "bill to" field was almost as good as a cashier's check. Nowadays, if you're in the business of serving other businesses you may find that your cash flow is less reliable than a small-time bookie's.
Commercial Collections: A Personal Story
This past April I finally got the $2,000 a client owed me for work done in December, after spending almost as much money's worth of my time reminding them to pay.
No, this wasn't one of those hand-shake deals-we had a 5-page contract specifying net-30 payment terms. Nor was this some guy with a lemonade stand. It was the media division of one of the largest retailers in the United States.
The worst part was, I trusted this client based on my experience working with them a few years before. I actually spent the money on Christmas presents, fully expecting the payment to come in before my credit card statement.
Avoiding Outstanding Invoices
Of course, you can nip this problem in the bud by cultivating strong relationships with clients who pay on time. But those clients are getting few and far between-and, as I found, the good can go pretty bad pretty fast.
Worse, it seems that the larger the business, the less likely they are to pay on time. "Net 10 days" might as well be a foreign language in Fortune 500 land. The long-standing advice given to B2B businesses and self-employed people is that the money is in big corporations. But good luck getting it from them before your rent is due.
What I Should Have Done
Looking back on my experience with the deadbeat corporate client, my biggest mistake was doing it all myself, with writing the letters and making the phone calls. With an hourly rate of about $75, I ended up spending the time equivalent of a large chunk of my $2000 fee.
I should have gone to a collection agency. I just didn't know then that were collection agencies that would take on small business debts and run the whole process for you for as little as $20 per debt.
Of course, I also didn't know that going to a collection agency didn't necessarily mean "putting an account in collections." Many collection agencies are in fact refashioning themselves as "accounts receivable management" specialists; they'll even manage your invoicing from end-to-end if you want. The client may not even realizing that the person on the phone is from an outside agency and not your own personal assistant.
When I think of all the value of the time I spent collecting that last $2,000, I could kick myself for not handing it over to a collection agency. But, I can always look forward to putting this knowledge into practice the next time I have a client who's slow in paying.
Steve Austin is a regular contributor to Let No Debt Remain Outstanding (http://www.let-no-debt-remain-outstanding.com/), a website with articles on choosing a collection agency, along with recommended the best collection agencies.
MORE RESOURCES:
 |
|
|
RELATED ARTICLES
Why Does Your Credit Card Rate Keep Going Up?
Have your read your credit card contract through completely? Do you know when it is okay for your creditor to raise your interest rates? If you are not sure about how and when your rates can be affected over the life of your contract you should take a few minutes to read your contract thoroughly from beginning to end.Creditors must have clauses in their contracts that give them the right to change your interest rates.
Bank Robbery Growing In U.S.
Bank robbery has grown to become a huge problem in the United States but I am not talking about people robbing banks. I am talking about banks robbing people.
What You Need to Know about Debt Negotiation on Credit Cards
Debt negotiation on credit cards is often referred to as credit card debt settlement. Whenever you make a credit card payment- or even pay your utility bills- it usually gets reported to one- or all- of the three main credit agencies.
Credit Card Disclosure Table - Do You Understand It All?
In addition to the APR (annual percentage rate) and the finance charges, most credit cards have a number of 'fees' associated with their use. Some fees are unavoidable with a particular card (like an annual fee or a program participation fee), while others are triggered by certain circumstances.
It Is In Your Best Interest To Do The Math On Your Credit Card Interest
If you begin foaming at the mouth once a month when you receive your credit card statement, join the millions of Americans that are foaming along with you. There is a growing outrage at the seemingly endless journey towards eliminating the balance on your credit card and that is due primarily to the extravagant interest rates charged by credit card companies.
Do you Know the Benefits of Checking your Credit Report?
Do you know why you should check your credit report?Of course you do, because you have undoubtedly experienced one working in your life!No matter where you roam, your credit report follows you through life, updating all aspects of your life: your employment, where you live, your opened credit accounts, your closed accounts, your payment history, and even public records on you.In this country, a good credit history brings you benefits of all kinds--a home mortgage, an apartment lease, an auto loan, or even more credit--with ease.
Student Credit Cards 101
Almost all students have and use student credit cards. Some of the students use them wisely and build for them an early credit history but others accumulate lots of debts that would have to be paid off once the student life is over.
Credit Suicide
Few things influence the home buying process more than your credit. I like how Clark Howard refers to the three credit repositories as, "the three screw-ups".
To Repair Credit Is No longer Satisfactory - Learn How To Earn A Millionaires Credit In 30 Days...
To repair your bad credit does not necessarily mean that you now have a good credit, absolutely not.
When most people have bad credit, they either purchase a credit repair book or seek a credit expert help.
Choosing the Best Low Interest Credit Card
With so many low interest credit cards on offer, how do you know which one to choose? Here is a brief guide for choosing your low interest credit card.The Chase Manhattan MasterCard is a great choice, for those with an excellent credit rating.
Cash Back vs. Rewards Credit Cards
Ah, the sweet rewards of using credit!Not only do you get immediate gratification with the buy now-pay later plastic, but now, many credit cards offer rewards and incentives for using their card to make purchases. You can get cash back, or gift cards, or 'reward points' that you can spend on merchandise or services from various merchants.
What You Need to Know About Credit Reports
You hear people talk about credit reports all the time but do you know what they are really all about? Well, if you have ever been turned down when applying for a credit card or a loan it is high time you learned all about your credit report and how you can get it working for you instead of against you.Let's start off by explaining what your credit report actually is.
Saving Money with Credit Cards
Having a credit card is a wonderful convenience for those times when you don't have immediate access to your cash. It can allow you to purchase something on time for which you can pay later, thereby giving you the ability to afford something NOW that you'd have had to save for later.
Why Credit Cards are a Bad Idea
Credit cards are just so convenient, aren't they? There's no need to carry any money with you ever again: you can just take one with you to the shop and pay the exact amount just by handing it over. If you haven't been paid yet, then you don't need to worry, because the money will still be there.
How To Use Your Credit Cards Wisely
Are you one of the thousands pulling your hair out trying to figure out how you're going to pay your credit card bills? Using your credit cards wisely and sensibly will help you avoid financial problems and establish a strong credit rating, so here's some information to help you get your credit card problems under control.Credit cards are convenient for buying things now and paying later.
Credit Counseling: Could it Work for Me?
In the face of financial hardship, many seeking a responsible solution turn to credit counseling. Credit counseling is, all too often, the last stop before bankruptcy.
10 Dirty Tricks Credit Card Companies Play
The credit card companies make billions each year in legitimate interest charges and fees, but are under constant pressure from the shareholders to increase their earnings. To make this extra money the credit card companies sometime adopt some dirty tricks to make this money.
Negotiating Rates with Your Credit Card Company
Ok, let's face it, everybody hates high credit card rates, and they drain hard earned money out of your wallet. As a valued consumer, it is apparent that you learn how to negotiate to get the absolute best rate that you possibly can.
Know Your Credit Card Rights
When you apply for a credit card, the application that you sign is also a legally binding contract laying out all the termsbetween you and the bank, such as the interest rate and how its calculated, the grace period, whether there's an annual fee, etc.While you have to agree to the terms and sign if you want the credit card and while the lender will certainly hold you to the terms, the lender doesn't feel similarly committed.
Dont Trade Your Future for Todays DooDads
"Easy Low Down Monthly Payment," "Buy Now Pay Later," "You Deserve the Car Today and We Can Finance It for You," & "Spend Today, 0% APR until Next Year!" We see those statements above every where today, on TV commercials, car dealership, banks and magazines. Those statements have put a lot of people into a financial disaster, because the statements make a lot of people believe that acquiring bad debts is an ok thing to do.
|