AK Collections Services

When I talk to potential clients, I find myself explaining what my company, AK Collections, is all about. Often, people think I’m a collection agency. In fact, I am not at all similar to a collection agency.

I handle my client’s collection calls, acting like an extension of my client’s business. I work with their customers, collecting monies owed my clients.

My intention is to spare the client-customer relationship so the two can continue to do business on open credit.

I am tenacious on behalf of my clients. After all, they pay me to do just this. But I do not threaten or intimidate their customers.

Unfortunately, there are times I have to turn a customer over to a collection agency. At that point, I’m no longer looking to save the account or work with them any longer. (It makes sense. And it is a better use of my clients’ dollars.)

See the difference?

For my clients, it’s like having another employee in their office.

And I treat my clients like I’m in their office, giving them 110% percent.

If I need to visit a customer, I will do that if at all possible. I don’t charge upfront fees. And if I see ways to improve my client’s aging, I will make suggestions.

What do you need?

Not every client wants a full-time collector. In fact, some clients just want advice.

If that’s you, I am happy to provide consulting services.

I can review your aging and the procedures of your collections department, make suggestions, and help put my proven collections procedures in place in your business.

For more information, please contact me at 845-928-6299 or e-mail me at: alan.kula@akcollectionsservices.com.Visit my site: www.akcollectionsservices.com

Outsourcing: Not always a dirty word

During his recent State of the Union address, President Obama spoke about the popular practice of businesses outsourcing to other countries. (No doubt you’ve come across this on a very personal level if you’ve ever had to work out a credit card issue, especially on the weekend.) In his speech, the president proposed offering US companies tax breaks for doing business in this country.

Since the speech, I have been reading and hearing about the overwhelming enthusiasm with which this proposal was met. (I’m in agreement!) Certainly, this is a step in the right direction in terms of getting people back to work and boosting the economy.

Outsourcing your AR—here at home

Accounts  receivables, much like other accounting functions and, for that matter, other departments in any business, can also be outsourced.

From the point of view of a business, it makes sense. It saves companies money. The work can be done off-site by a skilled professional.

But the money can stay at home as long as the companies work with US “outsourcers.”

If President Obama’s proposed tax break legislation is passed, tremendous numbers of entrepreneurs and companies here in this country would benefit.

What I offer

With AK Collections, my clients get an experienced credit and collections specialist here in the US. For an hourly rate and with no upfront fees, I handle their collections calls, acting like an extension of their accounting department. The biggest benefit: Hiring me does away with the expenses of a full-time employee.

Additionally, there won’t be any communications problems. (I’m sure you understand the frustration of talking about your own money with someone you can barely understand, or who doesn’t clearly understand you.)

Another advantage to outsourcing with AK Collections is that when customers need to call me back—which happens often—they get me on the phone. Not a new person, requiring them to explain their situation from the beginning. Plus, if they need a call back, they’ll hear from me.

I do have clients located in other countries. These accounts do business in the US, so it makes it easier for me to speak to their US customers than if they had to call from Europe, Asia or wherever.

I can tell that all my clients feel a sense of relief that they don’t have to worry about their collections. They know their AR is in good hands—mine!—which frees them to focus on making sales and managing the other demands of doing business.

For more information please contact me at 845-928-6299 or email me: alan.kula@akcollectionservices.com. Also, be sure to visit my site: http://www.akcollectionservices.com

Guest blogger Ramir Rodriquez of Treasure Valley Factors -ACCOUNTS RECEIVABLE COLLECTION CYCLE

Most business owners understand how long it takes for them to get paid.  Consider the following timeline:

Invoicing – After a job has been completed an invoice is created.  Invoices are usually generated, depending on the type of business, within 1-3 business days.

Delivery – Most small businesses send their invoices my mail.  Depending on where the client resides, mail can be delivered immediately or within days.  On average, mail is received within 3-5 business days.

Invoice Due – Generally, small businesses get paid within 30 days of invoicing.  This is a common length of time businesses give consumers or business clients to pay their invoice.

Receive Payment – There are a few payment methods available – payments over the phone, online bill pay, or online website.  Most businesses, however, choose to pay by check and sent by standard mail.  Again, depending on where the client is located, it can take 3-5 business days to receive payment.

As you can see from this timeline, it can take a business about 34-38 days on average to receive payment on work that has been completed.  These are average figures and for some businesses payments may come much sooner.  But it is not uncommon for businesses to receive payments past 30 days – some reaching 60 or even 90 days!

Improving Accounts Receivable Collection Cycle

Most small businesses can use advice on improving their accounts receivable collection cycle.  A business that has a sound and efficient billing process can minimize late or non-payments.

One suggestion is to have a complete invoice.  Invoices must be easy to understand, detailed, and specific.  It should contain all the necessary information that both you and your client can see and understand.  Invoices should contain at least the following items:

•    Your company’s and your client’s contact information

•    Date the invoice was created

•    Detail or description of service completed or product delivered

•    Total amount due (include itemized amounts if necessary)

•    Date when total amount is due

Another recommendation is to immediately generate an invoice as soon as the work has been completed.  The sooner your client receives a bill from you the less likely they will forget to pay.

Know Financial Options Available To You

Knowing that oftentimes it takes an average of more than 30 days to get paid it is very important to have sufficient cash on hand to cover business expenses.  If improving the accounts receivable collection cycle is not enough to remedy a poor cash flow small businesses must understand financial options available to them.

Traditional banking can assist small businesses with a variety of bank products and services.  Because a business has a checking account with a bank there is already a relationship established and an understanding of any challenges that may exist.

If a small business is not bankable alternative financial options such as accounts receivable factoring can help improve cash flow.  Factoring allows small businesses to have access to cash that is tied up in accounts receivables.  If clients continue to pay slow despite a business owner’s efforts in improving their billing, factoring is a great financial tool to get paid much sooner on work that has been completed.

 

For more information on factoring visit Factoring Helps or email me.

 

Ramir Rodriguez is a business development officer for Treasure Valley Factors.  He helps businesses understand how factoring can help them get paid sooner on work they have done and grow their business.  He has a B.S. in Business Administration with an emphasis in Management from Eastern Oregon University.

Communication, good. Payment, even better.

There are customers who can’t make payment, and they’ll tell you so.

There are customers who can’t make payment, and they hide.

Here’s what I tell my customers who hide: “I cannot keep your bills open on my books.”

It always surprises and disappoints me when a customer doesn’t get it.

How communication works—and what happens when it doesn’t

I will always “work with” any of my clients’ customers. By that I mean, I’ll figure out an arrangement that gets my client paid in the quickest way possible. I do this to avoid using a collection agency to collect the outstanding debt.

But, sometimes, that’s not possible.

I recently turned an account over to a collection agency after a month of leaving messages for the customer (which were never returned) in addition to sending emails (which were also never replied to).

But, even at that point, I didn’t give up.

I sent a certified collection letter. Then I left one last message. And finally, I turned the account over.

Not even 24 hours later, I received an email from the customer, with an explanation as to why they hadn’t responded to me and offering me a payment plan and credit card.

Too late!

At that point, it was just too late. It was in the hands of the collection agency.

Interestingly, this same customer was simultaneously telling the collections agency they didn’t know they owed me money.

Gee, maybe if they’d listened to their voicemails or opened their email once in a while. Or, for that matter, opened their monthly statements. (I email statements out for my client. Part of AK Collections being an extension of my client’s AR department.)

Fair warning

I give fair warning to delinquent customers: Once I turn them over to a collection agency, I don’t want to hear from them. I tell them the collection agency will be contacting them shortly with demands for payment.

In this recent case, and as has happened many times before, the customer still came back to me. What could I do? I referred them back to the collection agency and said I was sure they’d work something out.

Unfortunately for the customer, working with a collection agency will cost them more than if they’d worked out something with me.

 

What is your last contact to a customer before you turn them over for collection?

Please visit AK Collections Services web site to learn more about my collection services. http://www.akcollectionsservices.com

The keys to collecting? Patience and persistence!

I hear quite frequently about how frustrating collections can be for businesses.

In fact, I have heard business owners say about a delinquent customer, “I don’t care anymore, send them to a collection agency.”

Sure. They can send half their AR all to a collection agency, but with a little more patience and a lot of persistence, the monies spent to have a judgment issued can be saved. (And even with a judgment, full payments usually aren’t sent quickly.)

Key #1: Patience

Accounts can be collected by showing patience. Often, that means by talking with the customer and explaining to them that, while you understand how tough it might be in the market, you need to get paid. You have bills too, and people to answer to.

I tell them the truth—that I need a prompt payment or I won’t be able to keep their account open on my books.  I let them know that, if they don’t communicate with me and they don’t attempt to make a payment, I have no choice but to send them my collection attorneys.  More times than not, this gets an account to realize, “Hey, this guy wants to help me out but can’t if I don’t work with him.”

Key #2: Persistence

There’s no way around it. Without persistence as a collector, you’re doomed.

If it takes three or four calls to get an account on the phone, you have to do it. And when you do reach your customer, you need to make the most of the call and control it.

Controlling the call helps ensure payments, not excuses.

You need to let the account know that time is running out. Same with follow-up calls. I always let an customer I speak to who makes me a promise for payment that I will be following up with them in a reasonable time frame. When I call back, I expect them to answer. If they don’t, I “date them up” for another call within 24 hours.

Try putting these two calls-to-action into your collection efforts.  It will improve your aging for sure.

Took a day off

Like everyone else, through the holiday season I was very busy—between working for my clients, taking care of my kids and finding time to spend with my girlfriend.

It seems like just yesterday it was July 4^th. Time has flown by and here we are looking at Valentine’s Day coming in just a few weeks.

During the last six months, I have been working hard for my clients, even when they were closed for holidays. When I am not making collections calls, I work on other aspects of my business—all the time juggling my home responsibilities.

During this period, I’ve also worked on seeing Kathleen at least twice a week. Most of our dates together, if not all, were short and sweet and usually involved some kind of work on our both of our businesses. It hasn’t been that relaxing, but it’s always fun to be together while handling business or chores.

Feeling a little burnt out and needing some time away from the grind, I took a day off and headed  to one of my favorite places for some R&R with my honey. No, it’s probably not the best time of the year to go to the New Jersey shore, but it’s always relaxing to watch the waves hitting the beach. Later, we’ll enjoy a nice dinner and watch the Giants beat Green Bay.  Honestly, it doesn’t get any better than that.

Now, it’s back to my clients as I move into my busy season with them.  Need helping collecting your AR? Please check out my web site. www.akcollectionsservices.com

The customer who needs sympathy

Yesterday I placed a call to a customer of one of my clients. Before making the call, I already knew the customer’s business was up for sale. I was expecting to hear about that.

What I wasn’t expecting to hear when I spoke to the owner was that the sale has been delayed because of several things that had occurred over the last several months.

First, the owner’s wife went into the hospital for cancer surgery. The operation was more involved than expected and he was totally immersed in taking care of his wife for a while, helping her get back on her feet. Next, he had to have knee replacement surgery; he’d been hobbling around just trying to get through the holiday season.

Finally, the customer was forced to put the sale of the business on hold because his building failed inspection. When we spoke, he informed me he was in the process of removing asbestos so that he can sell the business.

As if all that wasn’t enough, he let me know he had to write off more than $14,000 in holiday merchandise (it didn’t sell).

I listened and offered my sympathy and concern for his tough times. He shared with me that his wife is feeling better and helping him in a big way with the business.  With her help, he’s working on fixing the problems with his building. He said he plans on selling the business by the end of this month. My client will get paid by the new owner, he said.

I believe with the help of his partner, his wife, he will get it all done—fix his building and sell his business.

He gave me information on the prospective new owners. I plan on following up with them within two weeks. Based on my conversation, I fully expect to get paid, because I showed sympathy and concern.

Lesson learned. It doesn’t always serve you well to play the “tough guy.” Sometimes people just need to explain their situation. And they appreciate when you don’t badger them.

A little understanding can go a long way.

Start the New Year off right

I have written and talked about the importance of reviewing and working on your AR during the holiday season. That was a great time to stay in front of your customers with their past dues. I also talked about how during the winter months  payments tend to slow down.

The winter blues

As a collector that will start hearing all the reasons when a check can’t be sent from the poor season with lack of traffic the customer just had to the cold and snowy weather that continues to hurt their cash flow.

My solution

A collector can’t get caught up in this stuff because we still need to get paid. I express my sympathy a, I listen to their problems and concerns and attempt to get a commitment. I usually do with my approach.  I let them know I care that their struggling, they open up a little to me and will get me a payment.

The plan

I read a lot about offering a payment plan, which is great idea. I have found making a payment plan isn’t always kept by the customer. They agree to make a monthly payment. Great, the first one comes in, I date up for 30 days, and then I call. The account doesn’t take my call, a week passes, then I get promise and another week passes. Before I know the account is a month behind.

I like to get a customer to commit to one payment at a time., That is pinning them down to when that first check is going out. After I get the first check, then I call for the next check. Staying in front of the customer is the key instead of waiting 30 days or two weeks for a payment to come in.

Un-bloat your AR

A bloated AR—an Accounts Receivables that’s fat with uncollected bills—is more than just frustrating. It’s dangerous!

Like bloat around the midsection, which we know is hazardous to your health (signaling insulin resistance and an increased risk of cardiovascular problems), AR bloat is a hazard to the health of your business.

It’s money you can’t use to reinvest where you need to. It’s credit you can’t get from the bank. It’s stuff YOU can’t do to prosper!

The only solution to AR bloat is a good financial diet and exercise. That’s right. A smarter expenditure of calories (your MONEY) and some vigorous collecting!

For the former (a good financial diet), you may choose to require payment as COD for delinquent customers. Or even hold off on all former shipments or orders until your customers’ debts are handled.

For exercising off a bloated AR, that comes down to collecting! Making optimal use of the calls you place. Getting payment agreements.

The sad state of affairs

Many AR departments these days are down to one lonely person making the calls, usually operating under a quota. He (or she) has got to place a certain number of calls each day. It’s no wonder so many attempts turn up empty, with just a note in the system that says a message was left on voicemail. This happens, sure. But it can’t be the end of the story until next month.

That’s where I come in. I’ll cut those once-a-month phone calls way back and call until I get a human being on the other end of the line—even if that takes several times a week.  Using a little TLC, I’ll put your customers on a good schedule to help them pay your bills—which will help them cut their debt, too, so it becomes a win-win situation! And until a payment is made or a payment arrangement is established, they will receive regular phone calls from me.

There’s no better time to un-bloat your AR. Give me a call so you can start the New Year with your business in great shape and not have those pesky resolutions to think about!

5 smart steps to take now to reduce your past dues

1)      Print out a copy of your aging and review it, account by account.

2)      Circle the past-due bills in red. These need an immediate call. (The accounts I have been working on I’ll leave alone at this point. For those I haven’t spoken to recently, I’ll circle them for a call.)

3)      Start making the calls! Call each account that you’ve circled, one after another.

4)      Document the results of all the calls, such as “S/W (spoke with) owner. Check T/B (to be) sent by EOW (end of week).” This way, if the check doesn’t show up you’ll know whom to call.

5)      Follow up! Very important! Being persistent is the key to getting paid. Use your calendar; date up for follow-up call. (Note: Every follow up is different, just like every collection call is different.)

After you’ve completed this task and you’ve reviewed your entire aging, start all over and see who still needs a call. Get a head-start on the bills that aren’t as old or those that are smaller in dollars owed.

Start this process today, within two weeks your past due columns will improve.