Category Archives: Uncategorized

10 Steps to Starting and Managing a Business

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Starting a new business is both exciting and daunting! The list of things to do feels endless and endlessly growing. From writing a business plan to registering the name and getting licenses, you’re on the go and in constant motion. And constantly learning!

The SBA.Gov website is a wealth of information for business owners just starting out. Their 10 Steps To Starting A Business article is a fabulous place to begin research.

Not only will you find instruction on how to finance your business and how to pick a location, but the article includes resources for those who want a home-based business, online business, a veteran or woman owned business and more.

As another valuable read, download our How To Extend Business Credit handbook. In it you’ll find sources for credit information, the legalities of investigation, establishing credit terms and how to evaluate the risks of extending credit.

As an added bonus, you’ll find credit application free for your use as well as an internal worksheet checklist to help you cover all your bases on credit applications. It’s free to download and share.

Is the U.S. Headed Into a Recession?

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A recent survey of economists concluded the chances of the U.S. experiencing a recession are at 18%. In December, it was half that.

While economists vary in opinion on what is driving us toward a recession, Brett Ryan chief economist at Deutsche Bank claims, “The manufacturing sector is already in recession.”

The plunge in oil prices have caused smaller energy companies to go out of business and are inducing stress in the credit markets tied to oil and oil contracts. Consumers may get a tax break and significant pleasure at the pump but the joy isn’t felt globally, as Stock Markets experience drops as a direct result.

According this report by CNN Money, “Citigroup predicted a 65% chance of a U.S. recession…”

Don’t View Your Collection Agency as a Commodity

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When choosing a commercial collection agency, consider this your top priority: Rate of recovery.

Don’t select a Commercial Collection Agency based on the rate they’ll charge you. Cheaper isn’t necessarily better. Quality collection agencies typically cost more and there are good reasons for that. Consider the following:

Licensing

Not every commercial collection agency is licensed. Those that invest the time and money into obtaining and maintaining a license are held to a high standard. They operate within the laws of their state, they monitor their collectors and they invest in the resources it takes to offer top-notch performance and record keeping. It’s not cheap to obtain a license, but it is to your benefit to partner with agencies that make licensing a priority.

Professional Debt CollectorExperience

Collectors with experience and expertise in the field cost more. And they are worth every penny. Our average years experience for our collectors is 18 years.

Account Management

Many collection agencies take on the easier, big money accounts and leave difficult accounts to an attorney. The minute the attorney takes over, your rate increases. Essentially, the collection agency collects the easy accounts while getting paid for the tough ones they sent to the attorney’s office. Doesn’t sound fair to you, does it?

Agencies that employ a team to work an account will address the easy and difficult cases, avoiding the use of an attorney unless it becomes inevitable. On the one hand, there’s an expectation that they’ll lose money on those smaller, easy accounts – but on the other, they’ll win the long-term loyalty of their customers with greater overall success on both large and small accounts. It’s a partnership of trust that can potentially last for years bringing greater gains to both the agency and the customer.

Remittance

The agency that holds on to your money is collecting interest that belongs to you. Quality agencies remit quickly. It certainly costs the agency more to remit on a weekly basis, but this puts your money in your account working for you more quickly.

Communication

Technology costs money. But utilizing cutting edge software keeps the customer informed, which is critical to the process of successful debt collection.

The bottom line when choosing a commercial collection agency is dollars that come back to you. Net recovery is the number that is most important. Before you inquire about their percentage rate, ask the following:

  1. Are they licensed?
  2. What level of experience do the collectors have?
  3. How do they handle small balance accounts?
  4. How often do they remit?
  5. How many collectors will be assigned to your account?
  6. What are their methods for communication?

Quality commercial collection agencies are likely to cost more, but they also collect more for you.

Effective and EASY Follow-Up Strategy

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Get paid with this effective and easy follow up strategy

Making a collection call can yield any number of outcomes. You may get paid immediately, you may be assured payment has already been sent OR you may hear a convincing promise to pay.

If you don’t get paid on the spot, then you must follow-up on any promises made during the call. Follow-up is the key to resolving the issue. And here is one effective way to do that:

email-iconAs soon has you hang up the phone, send a “Thank You” email.

The subject line can simply read, “Thank You”. It’s non-threatening, so your customer is likely to open it right away. In the body, state in as few words as possible what you understand the next steps to be. Maybe this comes in the form of re-stating the promises your customer made on the phone. Include your expectations as you expressed them when you spoke including any dates and times mentioned in the call.

End your email with a question that requires a response. This helps to confirm the email was read and received. An example may read something like this:

Dear Ken,

Thank you for taking the time to talk with me on the phone this morning and for letting me know about the issues surrounding the invoice dated July 6.

Given the circumstances, I’ve waived the late fee. When your check arrives in a couple days, I’ll phone you to let you know.

It’s my understanding from the call that your next order will be placed on or around the 15th of March. Did I get that date correct?

Thanks again,

Tom

In many cases, a simple follow-up of this nature can serve to cement the promises made during the call.

Guide to Collection Letters

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What you need to know about writing good collection letters

LetterAt C2C Resources, we like to provide information not only to our existing 25,000+ customers but also to would-be customers, to help them improve their in-house collection processes.

For us, we see the long-term value and trust that’s built by helping businesses build strategies that work, thus minimizing the need to use a commercial collection agency like ourselves.

Our strategy is simple: trust builds long lasting, mutually beneficial business relationships. We’ll show you how to collect in-house with strategies that provide results – you’ll come to us for handling cases that need the touch of professional collectors.

One tool we provide at no cost is our Guide To Collection Letters eBook. It’s a free download, no strings attached. It’s our gift to you in the hopes that, if you need a third-party commercial collection agency, you’ll think of C2C Resources first.

Download your copy right now to get started writing collection letters that get results!

4 Most Common Responses to Your Debt Collection Campaigns

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Running an internal debt collection campaign is essential for getting the money back that your company is rightly owed. While it is important to design your debt collection campaign to effectively reach out to clients quickly after an invoice goes unpaid, knowing what to do after your call, email or letter will help drive success.

Here are the top four most common responses businesses receive from their debt collection efforts:


Prompt payment
This is the ideal scenario. Sometimes a missed invoice is a mistake within the accounting department or the result of an employee being on vacation. If the client promptly pays after you reach out to them on a past-due invoice, always verify the following:

  • The best point of contact’s name, email address and phone number
  • Their preferred mode of contact for invoices (email v. mail)


Acknowledgement, with actionable response
This is the next preferred scenario after you contact a client concerning delinquency. When a client acknowledges that they are late on their payment and confirms a date they can pay their invoice, as a company you should follow-up to confirm:

  • Method of payment
  • If they have all of the essential information to pay (routing number, company address, etc.)
  • Reason for late payment. Gathering as much information as possible for your records is important should the delinquency happen again.


Acknowledgement, but no actionable response
In this scenario, the client is aware that are late on their invoice, but does not confirm or offer a date for payment. Always reach out to the client because he or she could have forgotten to include that information in their communication with you; or they could be waiting on someone within their business to confirm a date of payment. Whatever the case may be, it is your goal to get a date set with the client. The probability of receiving payment drastically increases when you can commit the client to a specific date or payment plan.

No response
If you receive no response from a phone call, email or mailing, there may be several reasons for this.

  • You may not be contacting the correct person.
  • The client has a cash flow problem and has yet to find a solution. They are simply trying to avoid communication with you.
  • The client is unwilling to pay the invoice and is trying to avoid you.

With any delinquent invoice, you should always follow the bad business debt timeline, which features a series of phone calls, letters and emails to engage with the client. You can find the full timeline here: http://c2cresourcesblog.com/c2c-resources-commercial-debt-collection-agency/bad-business-debt-timeline/.

Five Tips for Making Collection Calls that Get You Paid

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Debt collection calling is not the type of task most employees get excited about. Typically, in-house campaigns take employees out of their comfort zone. For most small businesses it is a task given to employees in addition to their normal job responsibilities. Don’t waste your time and money with an inefficient debt collection calling campaign. Instead, be successful from the start!

Here are the top five things to do when making collection calls:

Always prepare for excuses.

Unfortunately, most debtors will not be quick to offer payment options. Don’t allow yourself to get flustered by excuses. Instead, be prepared. Here are the most common excuses you will hear:

The check is in the mail.
How to respond: Ask for the date of the check, amount, address where it was sent and check number.

I never received the invoice.
How to respond: Always give the customer the benefit of the doubt. This is a great time to verify their preferred method for their invoice: email or mail. Always follow-up this discussion with asking how the customer will pay the past-due balance.

Our business is going through financial problems.
How to respond: Work to set up a payment schedule with the customer.

We completed the wire transfer yesterday.
How to respond: Ask for the routing and banking information. The customer could be telling the truth, but you need all of the information you can collect to verify the validity and make the most of the call. 

 

Do your research before the call.

Learn as much about the customer as possible before picking up the phone. Common information to find out includes:

    1. Has the customer had payment problems in the past or is this uncharacteristic?
    2. Did the sales person have concerns about the account?
    3. Terms of sale
    4. Payment due date
    5. Exact amount due

 

Always be professional.

Never threaten a customer for payment. The goal of the collection call is not merely to successful collect payment; you should try to also maintain the business relationship if possible. When on the collection call, follow these tips:

    1. Never multi-task. Be completely focused on the call.
    2. Speak slowly and take more pauses when you speak.
    3. Never eat food, drink a drink or chew gum while on the phone.
    4. Go into the call with a positive attitude. Your tone and inflection of voice will mirror your attitude.


Ask open-ended questions.

You will never get paid if you only ask questions with Yes and No answers. Let’s look at a scenario:

Option A: Do you plan on paying us soon?

Option B: What date can I expect payment from you?

Option B is obviously the better choice. You are committing the customer to a specific date. Make it a goal to commit the customer to something before getting off the call: full payment, partial payment, or even a date that they can let you know their payment plan (Remember, sometimes your main point of contact does not control the money within the business.)

 

Be deadline-driven, but still flexible.

Debt collection requires you to walk a fine line. You need to be assertive, but not too pushy. Always emphasize the urgency of the matter and try to have the customer commit to dates for payment.

 

Internal Credit Application Investigation

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business

Whether you have taken advantage of our free credit applications or not, your business needs to utilize an internal checklist during the investigation process to verify that the information provided is correct. A verification checklist not only keeps your staff honest in verifying the entire application for every client, but ensures that your business is not endangering itself with bad business debt. This is particularly important for clients who you have never worked with.

If you have not used a credit application checklist in the past we suggest making it your year-end goal to review all existing credit applications for credit that is currently extended.

Verify the following business information provided within the credit application and review any discrepancies with your client:

  • Legal entity status
    • Most states’ Secretary of State Websites will allow you to verify the corporate status. Make sure to keep this on file either digitally or as a hard copy. Included on this site will be the principal office location, the business’s original date of formation and their main point of contact.
    • Phone
      • Do not just verify that the phone number is listed online. Dial the telephone number and see if they answer with the name given.
      • Business Name
      • Address
      • Contact Name/Title

Verify the following bank information:

  • Name of bank
  • Address
  • Phone
  • Contact Name
  • Account Number
  • Age of Account

As a best practice, always contact the trade references listed on a credit application. Remember, most business owners only provide contact information of companies who they know will give good references. Nevertheless, contacting the references provided will give you a further understanding of a client’s payment history, relationship with other vendors and balance ranges that they have had in the past. If you do have concerns over a client, you can always investigate and see if they include suppliers on their website who you can reach out to. They may provide you a more accurate snapshot of the client’s history.

The credit application and investigation process are valuable tools for your business. Always keep a copy of both the application and your investigation notes for future reference.

Here is a copy of our internal checklist. Fill it out online or print it out and scan the documentation into your client’s file.

http://c2cresourcesblog.com/wp-content/uploads/2012/09/Internal-Worksheet-Checklist.pdf

How To Write a Great Collection Letter in 8 Steps

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When you sit down to write a debt collection letter, do you find yourself frozen at the keyboard, unable to find the right words?

You may know exactly what it is that you want to say but, for whatever reason, when it comes time to actually write the letter, you struggle to get the words on paper.

Writing a great collection letter is tough, even for good communicators. Frustrations about the past due invoice and the pressing financial stresses that it has caused can get in the way of writing a letter that’s fair. While frustrations and emotions can be a hindrance, it’s possible to rise above and write an effective letter. Try using the following 8 steps to create a collection notice template to use over and over.

1. Limit your letter to one page using short sentences and brief paragraphs.
Don’t feel the need to explain why you need to be paid. You provided a service or goods and your client agreed TO pay. That’s the bottom line.

2. Label the envelope personal or confidential.
This helps to route the letter to the person responsible for the invoice in question.

3. Sign the letter personally.
The fact that you tended to the matter personally adds a level of urgency for the reader.

4. Avoid any wording that could be misunderstood as insulting, intimidating or threatening.
Professionalism through courtesy and respect is always the right path to choose.

5. Don’t apologize.
Any issues regarding your services or goods should have been brought to your attention by your customer long before he or she received a collection notice.

6. Make details clear and paying EASY.
The amount due, your contact information, any reference numbers, your address, phone number, fax number and any other pertinent information should be clearly stated. Include the details for the easiest way to pay you.

7. Be positive.
It’s quite possible that the past due invoice is an oversight and it’s a good idea to treat your first collection notice as if that’s the case.

8. Be firm.
State what you expect: Payment.

Your primary goal is to get paid. Your secondary goal is to retain a quality customer. If you can work WITH her to resolve a debt and thereby maintain good will, that’s even better!