|
Click Here for more
articles
|
|
|
|
Commercial
Collections: Business Finance Booster Shot
|
|
by: Joel
Walsh
|
If
commercial collections is not part
of your B2B business plan, you’re losing money. Get your cash
flowing again with these commercial collection secrets.
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.
About the author:
Joel Walsh, a freelance writer and regular contributor to Collection
Agency Information (http://www.let-no-debt-remain-outstanding.com),
invites you to http://www.collection-agency-information.com/collection-agency/nationwide-collection-agency.htmldiscoverthese
commercial collections secrets: http://www.collection-agency-information.com/collection-agency/nationwide-collection-agency.html
Circulated
by Article
Emporium
|
|
