My daughter is visiting. She's 28 and lives in San Francisco with her 10 year old son, Eli. She's an aerial artist who supports herself by writing grants for a non profit charity. ( There I managed to paint an outline of her in two sentences that does her justice!) She's affectionately referred to as "mini me" and "Darling Dee".
When she was growing up I went through several bouts of serial dating. I was the hot mama! Even her college friends said so - a MILF (A title I was proud to own I might add!) Short blood red spiky hair, size 2 and buff from training, with a killer wardrobe and a passion for sexy high heeled shoes. I have a nose piercing. I think she liked having a sexy mom. She certainly liked borrowing the shoes from my closet.
But I'm married and post cancer these days, and perhaps not so sexy. Today she stopped as she passed the bathroom where I was combing my long hair before dinner. "Oh Mom", so sighed. "You and your hair!"
I asked her what she meant. "Well it used to be so hot and short and sexy," she told me. "Now you have that cutesy pink clip in it with bling,..its just not your style!"
OK, I admit I was sad. 'This isn't my style either' I told her later. This is just what happens when you have to take drugs for Rheumatoid Arthritis, and you've had gall bladder surgery, and your hair is post anesthesia! It gets a bit dry and brittle as you get older...and its almost white, so as my color grows out I have roots! I can't wear it up, tussled on my head in a sexy knot with white roots! The spiky red hair was totally cool back when Annie Lenox ruled and I lived in Asia and San Francisco. Here in the almost south, it's a bit harsh and unexpected on a slight 52 year old. It frightens off the natives! The best thing I have heard said about it was that it made me a bit unapproachable and intimidated most men. (Not to mention women...who all thought I looked too much like competition and wanted me as far from their husbands as possible.I was rarely invited to dinner parties when my hair was short and spiky!)
The long brownish/red straightened hair is pretty and sophisticated. My husband likes it. It doesn't intimidate anyone. Its easier to tie back and 'clip'. But I do mourn "the look" that made everyone comment. My crowning glory has gone the way of my fast fun youth. One day Darling Dee will understand when its just not cool for her to wear her Mohawk anymore!
Ok, I just had to wrote it....
Tuesday, July 5, 2011
Saturday, July 2, 2011
Show me the money....
Instead of complaining, (which I realize has been the majority of my bogging so far, ) I thought I might try and post something helpful.
How to manage account collections in a small business.
This is a subject dear to my heart: If you don't manage your collections you won't stay profitable and remain in business. I am a publisher and all my income comes from advertising. For most of my customers, advertising is a long way down the list from rent and the electric bill. It's also low priority when American Express is calling asking for payment in full on all the product you bought at the trade show!
I believe that I offer very good value for money and that our publications produce real results for our customers. I want to stay in business and I insist on getting paid. That does not always make me popular. I have been called some really nasty things for going after a bill. Too bad! Until recently I was single, and not getting paid meant not paying my mortgage. I have have extended credit during hard economic times to new customers to attract business. But I am not going to be an easy mark.
Rule 1. Document
Every customer gets a contract. It has their name, signature, address, social security number and tax ID. It has a minimum of two phone numbers and an alternative contact name on it! It has been reviewed by an attorney and the credit bureau: The wording is airtight. It is collectible in a court of law.
It also states, as does every other piece of marketing material and pricing information a customer gets, that all discounts and deals are null and void once that bill becomes delinquent. This can be a very good negotiating point later on.
I use Quickbooks for my accounting. Its' fairly easy to master and keeps very good records for tax purposes. It already has collection reports and past due account information, so finding the list of scumbags (I mean valued customers) who owe you money should not be hard. Enter every invoice and make sure even cash payments are entered into the system. I always give a receipt for cash from a receipt book that is numbered.
Rule 2. Document
My invoices are due net 15 and they say so. On the invoice itself, on the contract, on the sales information packet and on my collection letters. I give 15 days grace period and then the bill is past due. At the 30 days mark customers get a 'past due' statement. It's stamped past due! It shows their account transactions from the last 0 balance (even if that was a year ago.) If they paid something in the last 30 days they get a cute pink sticker - " Please note new balance, thank you for your payment."
At 40 days past due they get a phone call, which is documented on their account. "We're trying to close out the books from last month and we noticed you hadn't paid your invoice. Did you receive one? I know things can get lost in the mail." This gives the customer an "out"; a way to save face and offer to pay right away.
Half of them claim they didn't get an invoice. So we mail and email a duplicate. We ask the to take care of the bill right way and if possible we pick up a check. Half of them pay up.
At 50 days they get another phone call: "Hi, we spoke last week and we still haven't received your payment, would you like to make an arrangement? If we don't get your payment in ten days interest will start to accrue. Please refer to your contract for the details" At this point you are probably leaving a message on a machine. These are your problem clients.
At 60 days they get a registered letter. " Here is your past due statement of all the activity on your account together with your invoices. We have added interest. (Compound, from the 30 day point after the first bill came due. If they make a payment and I know them, I sometimes do not add interest for that month.) All your discounts are now void and your account balance has been adjusted accordingly. (This one is definitely a shock for them as that bill has now substantially increased and you've added interest to the no longer discounted price.) We must hear from you regarding payment or an arrangement's to pay in 10 days or less. If we haven't heard from you by that date we will refer your account to an attorney. The attorney will add fees and further interest. You will be reported to credit bureaus. We don't want to do this and I am sure you don't want us to either, so please call."
A small percentage will now call upset and appalled that you increased their invoice and added that much interest. They will tell you some story about their sick mother, or that they had a client bounce a check on them...whatever. About 20% will pay some or all of the bill in an payment arrangement. Be prepared to call them weekly and collect the check in person. Be prepared to leave many messages on that answering machine. Be prepared to negotiate that interest. "Look, I will take off the interest if you pay this in full in three payments."
Who collects?
Account Executives have the best relationship with your clients so they should make the first calls. You should never make calls as the business owner. If possible have a spouse or friend make those second calls. Don't hesitate to play "good cop, bad cop". If you know the client well, it may be appropriate to call them and tell them that the account is heading to collections and you're personally asking them to take care of this matter. Be prepared to lose customers!
Rule 3. Use an Attorney.
Although you may have to pay fees upfront, attorneys are by and large far more efficient at collections than a credit collection center. If that bill is under $200 you may want to write it off at this point. The fees may out weigh the results. But a decent attorney can get 50% of the deadbeats to pay within a month. Some will go bankrupt and others will have to be garnished which could take forever.
We typically invoice 80 - 90 customers per month. I have less than 2% of my accounts enter collections, but it may take me a year, and a lot of calls and leg work, to get paid in full. I write off about 4 accounts a year. And I'm pretty happy with that :-)
I just had to wrote it...
How to manage account collections in a small business.
This is a subject dear to my heart: If you don't manage your collections you won't stay profitable and remain in business. I am a publisher and all my income comes from advertising. For most of my customers, advertising is a long way down the list from rent and the electric bill. It's also low priority when American Express is calling asking for payment in full on all the product you bought at the trade show!
I believe that I offer very good value for money and that our publications produce real results for our customers. I want to stay in business and I insist on getting paid. That does not always make me popular. I have been called some really nasty things for going after a bill. Too bad! Until recently I was single, and not getting paid meant not paying my mortgage. I have have extended credit during hard economic times to new customers to attract business. But I am not going to be an easy mark.
Rule 1. Document
Every customer gets a contract. It has their name, signature, address, social security number and tax ID. It has a minimum of two phone numbers and an alternative contact name on it! It has been reviewed by an attorney and the credit bureau: The wording is airtight. It is collectible in a court of law.
It also states, as does every other piece of marketing material and pricing information a customer gets, that all discounts and deals are null and void once that bill becomes delinquent. This can be a very good negotiating point later on.
I use Quickbooks for my accounting. Its' fairly easy to master and keeps very good records for tax purposes. It already has collection reports and past due account information, so finding the list of scumbags (I mean valued customers) who owe you money should not be hard. Enter every invoice and make sure even cash payments are entered into the system. I always give a receipt for cash from a receipt book that is numbered.
Rule 2. Document
My invoices are due net 15 and they say so. On the invoice itself, on the contract, on the sales information packet and on my collection letters. I give 15 days grace period and then the bill is past due. At the 30 days mark customers get a 'past due' statement. It's stamped past due! It shows their account transactions from the last 0 balance (even if that was a year ago.) If they paid something in the last 30 days they get a cute pink sticker - " Please note new balance, thank you for your payment."
At 40 days past due they get a phone call, which is documented on their account. "We're trying to close out the books from last month and we noticed you hadn't paid your invoice. Did you receive one? I know things can get lost in the mail." This gives the customer an "out"; a way to save face and offer to pay right away.
Half of them claim they didn't get an invoice. So we mail and email a duplicate. We ask the to take care of the bill right way and if possible we pick up a check. Half of them pay up.
At 50 days they get another phone call: "Hi, we spoke last week and we still haven't received your payment, would you like to make an arrangement? If we don't get your payment in ten days interest will start to accrue. Please refer to your contract for the details" At this point you are probably leaving a message on a machine. These are your problem clients.
At 60 days they get a registered letter. " Here is your past due statement of all the activity on your account together with your invoices. We have added interest. (Compound, from the 30 day point after the first bill came due. If they make a payment and I know them, I sometimes do not add interest for that month.) All your discounts are now void and your account balance has been adjusted accordingly. (This one is definitely a shock for them as that bill has now substantially increased and you've added interest to the no longer discounted price.) We must hear from you regarding payment or an arrangement's to pay in 10 days or less. If we haven't heard from you by that date we will refer your account to an attorney. The attorney will add fees and further interest. You will be reported to credit bureaus. We don't want to do this and I am sure you don't want us to either, so please call."
A small percentage will now call upset and appalled that you increased their invoice and added that much interest. They will tell you some story about their sick mother, or that they had a client bounce a check on them...whatever. About 20% will pay some or all of the bill in an payment arrangement. Be prepared to call them weekly and collect the check in person. Be prepared to leave many messages on that answering machine. Be prepared to negotiate that interest. "Look, I will take off the interest if you pay this in full in three payments."
Who collects?
Account Executives have the best relationship with your clients so they should make the first calls. You should never make calls as the business owner. If possible have a spouse or friend make those second calls. Don't hesitate to play "good cop, bad cop". If you know the client well, it may be appropriate to call them and tell them that the account is heading to collections and you're personally asking them to take care of this matter. Be prepared to lose customers!
Rule 3. Use an Attorney.
Although you may have to pay fees upfront, attorneys are by and large far more efficient at collections than a credit collection center. If that bill is under $200 you may want to write it off at this point. The fees may out weigh the results. But a decent attorney can get 50% of the deadbeats to pay within a month. Some will go bankrupt and others will have to be garnished which could take forever.
We typically invoice 80 - 90 customers per month. I have less than 2% of my accounts enter collections, but it may take me a year, and a lot of calls and leg work, to get paid in full. I write off about 4 accounts a year. And I'm pretty happy with that :-)
I just had to wrote it...
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