Last September I did a series of interviews and moderated a forum as well as taped a video all about credit and collections. The forum had some great questions and answers and I wanted to bring it up again because there was a survey that was done at the same time and the question was:
What do you do when you are late paying a bill?
The results are interesting and I thought you might like to check them out.
If you don’t have a Credit Policy for your business, you may be working for free. For many Entrepreneur’s, it seems easier to just process orders without obtaining any or limited information on the customer. Most new businesses are so excited to make a sale that they don’t want to offend the customer by asking them to fill out a credit application.
It is important for any business but especially small and new businesses to portray to potential and existing customers that they are serious about their business and their money. You started your own business so you could have control of your life, money and destiny. Don’t let your customers control you, ask for payment when it is due and don’t make the mistake of extending credit to someone without researching them thoroughly before the sale.
If a customer is offended that you want them to sign or fill out any paperwork that is a big red flag. When a customer doesn’t want to fill out a credit application, or sign an agreement, there is a reason. There are plenty of customers out there who will happily fill out paperwork to obtain credit, and who will pay on time. Focus your energy on those customers and you will have a profitable, stable cash flow to your bottom line. Do not extend credit to anyone without checking their credit, or you will find yourself working for free.
Not many people realize that Demi Moore was a debt collection agent before becoming an outstanding actress. Being a debt collector is a hard job and it takes a strong person with outstanding skills, drive and common sense to be successful.
All things we can see are traits of Moore if we follow Moore’s career through the years.
Demi Moore was born in New Mexico in 1962 and went on to overcome much in her life to build a better life for herself and her family. Being a bill collector is something that can contribute to such ambition and drive. You should take note of this because every business owners needs to learn to be a bill collector or hire someone to do it effectively for them.
“There are three main elements to any business in order for it to be successful”, says Dunn. “A business plan, a marketing plan and a credit policy. Most new and small business owners are lucky if they even think about a business or marketing plan and most do not even consider a credit policy.”
Most new and small business owners are more concerned with sales than with how they will get paid for those sales. This is a backwards approach to a common and growing problem. Try to think about how you will get paid before you make a sale, have those policies in place and you will get paid faster, easier and make more sales.
The Fair Debt Collection Practices Act (FDCPA) defines the term “Debt Collector“ to include ”…any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another…”
Debt collection cases are mushrooming in courts around the country. In Chicago, lawsuits against alleged debtors have more than doubled in recent years. The rise has partly to do with a sluggish economy. But those trying to collect debts are feeling the pinch, too.
Is this affecting your state? How about your business? Please share your experiences!
Tim Paulsen is the author of “Paid in Full” and “Platinum Negotiations”. He delivers highly rated seminars and is the Managing Director of ICPC (International Center for Professional Collections). Tim is great at what he does and I happy to have a guest post from him. Be sure to check out his website because he offers many tools to help you collect more money.
Elevator collection Techniques
In the speaking business, we sometimes talk about an ‘elevator’ story. This could be how one answers the question, “what do you do”. The response should not be longer than an uninterrupted ride on an elevator of normal speed from the 10th to the ground floor of building.
So, for those of you that are busy, here is my elevator story on collection tips in response to: “What are the best techniques to collect money owed to me?”
If you can remember and use these three tips, you’ll find that you will be ahead of most of the other people who may be trying to collect from the same person.
When debt collectors have the wrong number, don’t wait six months to let them know.
Interesting article.
Andre’s Toro Barea, 55, was found by a work colleague after failing to turn up for work. He had been shot twice through the chest according to Think Spain.
Dear Michelle
I am having a lot of trouble with dealing with the collections department of Bank of America (Client Service, Inc.). I called them trying to set up some sort of payment plan yet they insist on the past due amount in full or the entire balance. I have 2 accounts I am trying to resolve with them ($6500 (credit card) and $20500 (line of credit). I honestly want to make an effort to pay or one day settle these accounts but these representatives won’t budge. What can I do somehow come to a realistic payment plan I can afford with them? And if I am not able to pay them as they requested what will happen then (charge-off/judgment)?
Thank you.
Keyonia,
Dear Keyonia,
If you cannot pay the balance in full, you can send what you can afford, and they will have to accept those payments. Make sure you pay with a check so you have a receipt. You should also send a letter with your payment plan outlining what you stated here, advising them that you do not have the funds to pay the entire balance and will make payments of $000 on a certain date each week or month. Send that letter by certified mail so you have proof they received it. As long as you are making payments they cannot report to the credit bureau that you are not paying, it will show what you owe for a total and each payment should be reflected. You can always verify this by getting free copies of your credit report once a year and checking it to make sure it is correct and all payments have been reported.
Good luck! Michelle
Got a question about credit or debt? Ask Michelle at michelle@MichelleDunn.com or mail your question to P.O. Box 40, Plymouth, NH 03264