Commercial debt collection can be a real challenge.  The fact is, paying your invoices is NOT a priority to your customers. On average, 80% of your customers will pay on time, while 20% will not. Why is this so? The answer is quite simple: it’s not a priority. Paying YOUR invoice is not your customer’s top priority. In fact, many of your customers rely on this free-float to help finance their business. This strategy, known as Trade Creditor Financing, can hurt your bottom line if not controlled and managed.
The first thing is to realize that A/R balances over 60 days old do not pay voluntarily. Something has to happen on your part. Unfortunately, accounts receivable is not like fine wines or cheeses – they don’t get better with age. So you’re going to need systematic follow-up using solid and proven letters and call tactics. Studies show accounts payable departments pay in priority fashion. What this means is that your collection process (invoice, follow-up fax, calls, etc.) must compete with your customer’s other vendors for the next available A/P dollar.
Don’t Be a Bank to your Customer -Â You’re a BUSINESS, Not a Bank
If you’re a vendor-lender, I’m going to show you how to work your receivables, manage your cash flow, and cut you’re A/R department costs. Your customer calls this Trade Creditor Financing, but to you it’s called excess invoice float. And it’s costing you money. You’re a vendor lender carrying past-due invoices interest free.
Unfortunately, this is what trade credit has evolved into. I’m going to show you how to control it, manage it, AND THEN actually profit from it.
Visit the Stevens & Ricci Resource Center for access to pre-packaged collection systems & strategies, including the renowned IRS Collection System©. If you have questions or comments, Ben can be reached by email at bricci@stevensricci.com or by phone at 888-722-1611.
Tags: Final Demand Letter
