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DEBT COLLECTING Q AND A - Issue 3
By Jim Finucan
© Tiare Publications Group
Q) My small business has grown
over the past year, but the growth has also brought more
past due accounts. This is the first year I've had
these problems. Am I doing something wrong?
Tom S., Boulder, CO
Dear Tom:
There's an old saying "If you don't have accounts
receivables - why
not?" I don't know enough about your billing procedures
to know if
you're doing anything wrong, but let me start by
congratulating you
on the increased growth of your business in what was for
many a very
difficult year. Because you are doing more business now you
are
experiencing the associated aches and pains of having more
accounts
to worry about. Let's look at some basic structure that lays
a good
foundation for loss prevention.
Do you make your fees clear to the client before agreeing to
provide
your product or service? Some people are uncomfortable doing
this
and think it is counter-productive. Nonetheless, subjects
like price,
payment method and other contract terms should be
covered up front. Make sure the customer understands his
obligation
to you before you do business with him for the first time.
What does your contract include? Do you offer a discount for
quick
payment? (Sometimes this is a good idea.) Do you specify a
certain
number of days after which the account is considered
delinquent? Is
there a clause that allows you to add collection costs,
attorney fees
and interest if the bill becomes delinquent? If not, those
costs
will come right out of your own pocket!
And when a bill falls into the delinquent category do you
have a
procedure to follow? If not you should have such a procedure
and you
should be sure to follow through on it. (I'll deal with this
topic in
a later article.) Despite the delinquent accounts it sounds
like
2002 was a great year for you. I wish you an even more
successful
2003 and beyond.
Jim Finucan.
(End)
Jim Finucan collections "top gun" who has doubled
the annual gross
collections at every firm he has been associated with. His
book –
"Past Due – A Collections Manual" shows you how
you can achieve the
same results in your business. http://www.tiare.com/pastdue.htm
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