Friday, 12 September 2014

Dialing For Dollars – On Steroids!

The accounts receivable department is a very busy place – processing credit applications, limit increase requests, sales inquiries, processing and posting payments, and of course making collection calls. If your list of customers on your Aged Trial Balance is quite large, you may never get to the end of your customer call list before its time for another month end.

If This Sounds Like You – You’re Not Alone.

Many credit professionals have the same challenges. If the customer were to call, you could find the time to talk; however the reality is that the smaller balances do not get the same treatment as the larger ones. One solution could be to hire another credit analyst to make those calls if you have the time to train and budget for it.  Another common option, if your system allows for it, is to send your customer a system generated demand letter.

No Extra H/R Budget? Here’s a Cost Effective Option

If your system is capable of exporting customer data such as telephone numbers, customer account number, and customer name, we can create an automated telephone call campaign using a custom pre-recorded message. Thousands of calls can be completed each day. The message asks your customer to call your office or they have the option of speaking to a live operator at your company. You maintain complete control of the customer experience with all funds directed to your office.

Bottom Line

Custom calling campaigns have produced some amazing results. Clients report a payment in full rate of up to 50% for much less than the cost of another employee. Sales Managers report increased sales as a result of old accounts being resolved. And customer satisfaction results actually improve as customer issues are getting solved.

 If you are interested in deciding if custom calling campaigns are right for your business – give us a call today for a free review.

1-866-266-0117 Ext. 350

Monday, 8 September 2014

Recovering Your Collection Fees

To be able to recover your collection costs from a commercial debtor in the United States, you must have a valid signed agreement whereby the debtor has agreed specifically that the costs of collection are recoverable.  

A version of this clause may look something like this:
“The customer shall pay all solicitor's fees and expenses, and all legal costs as between solicitor and his own client on a full indemnity basis, as well as an allowance for the time, work and expenses of the Credit Grantor, or of any agent, solicitor or employee of the Credit Grantor, for any purpose herein provided for and whether such sums are advanced or incurred with the knowledge, consent, concurrence or acquiescence of the Customer or otherwise, together with interest thereon at the rate provided for herein, shall be repayable to the Credit Grantor on demand, or if not demanded then with the next ensuing installment payable to the Credit Grantor.”

Where these costs are recoverable, often the courts decline to add the total amount of the collection costs and/or contingent fees in the event you decide to sue your customer.
Funds paid for court filing fees, service of documents, etc.  are legally recoverable are added to the final judgment amount.

The Reality of Recovering Collection Costs

Notwithstanding the legalities, what are the chances of recovering collection costs from your slow-paying customer?

As with any business transaction, if you have a signed agreement where the customer has agreed to your terms and conditions, the chances are more favorable than if you do not.  Sometimes it may take court action to facilitate the recovery of collection fees.  It is only possible to enforce a legal contract through the courts.  Reputable and ethical collection professionals will not visit a debtors business premises to force payment of the collection fees.

At AAB, our approach is to recover all principal and interest charges on an amicable basis.  If the creditors agreement with its customer contains the required clauses to hold the debtor company liable for collection fees, then we will work to obtain those expenses as well.

Should your customer balk at paying these fees, they may be used as a negotiating tool to encourage prompt remittance of the principal amount of the debt.

When pressed, some debtors will agree to pay the interest expense, especially if they want to work with the creditor again in the future; however if there is no signed agreement to pay interest or collection expenses, the debtor will not pay them.

Thursday, 4 September 2014

How to Hire Top Shelf Credit Staff

In most small and medium sized companies the accounts receivable clerk was recruited from the accounting department and got the job by accident. If you were to ask these credit clerks if they actually enjoy their work – most will answer with a resounding NO! Employee turnover in this position is extremely high.

Low Job Engagement = Big Problems

If you check out the help wanted ads they are chock-full of employers looking for credit and collection personnel. We regularly see advertisements for the same companies every month. Turnover in any employee position is expensive; however the turnover of credit and collection staff can be exponentially more expensive if not caught and corrected right away.

Untrained Staff Managing Your Largest Asset?

So how do you attract and retain quality credit & collection staff? It all starts with your advertisement. Workopolis, Monster and Career-Builder are popular help wanted sites. Firms like Robert Half and Mercer Bradley can help you with recruiting as well. Increasingly sites like Craigslist and Kijiji have become excellent sites to post your advertisements.
Your advertisement is critical. Be specific about the job expectations. Post the salary or the hourly wage. Let people know exactly what they can expect. Pre-qualify candidates to make sure they possess the qualities of top credit and collection professionals.  There are several pre-employment tests that can be administered to help you short-list candidates for this specific position.

Ounce of Prevention vs. Pound of Cure

Once you have posted your advertisement, pre-qualified your candidates, and given thoughtful consideration to the job requirements – you are ready to make an employment offer. Attracting and retaining the right credit and collection personnel is critical to your firm’s financial success. Don’t leave it to chance otherwise you can expect the same results with your accounts receivables.

Need Help? No Time?

If you know you need help with your accounts receivable, we can help you draft an advertisement, test candidates and provide you with a short-list of people that actually want to work in credit and collections.

Call us today at 1-866-448-3936 for a free consultation and don’t leave your financial results to chance.