Monday, November 19, 2007

More kick-ass articles on how to collect bad business debt!


Why a Collection Agency Is Your Small Business’s Best Friend--Really
Copyright © 2005, Steve Austin

Does the term “collection agency” put you on edge? If you’re like
many small business owners, the mountain of debt you accumulated
during startup might have been enough to make you worry about
collection agencies every time you answered the phone. But your
feelings toward collection agencies are eventually going to
change, if they haven’t already.

While no one wants to hire a collection agency, it’s a sad
reality of doing business that not every customer feels the need
to pay, or has the ability to pay all at once. If you want to
stay in business, you’ll need to collect that money. When your
most polite and not-so-polite reminders to pay have failed,
you’ll need to start getting serious, which means going to an
agency.


Small Business Collection Agency Services: More Benefits than
Costs

Small business collection agency services will certainly cost
more than just writing letters demanding your money back. But the
amount of money you’ll collect, not to mention the time you’ll
save, will more than pay it back. In fact, when you consider the
hourly rate of your employees, or you yourself, collection
agencies’ fees really can be quite a bargain.

Let’s say you have an assistant your business pays $10/hour,
effectively costing your business $15/hour once you count in
employment taxes, benefits, and the overhead of your office. You
would be lucky if that assistant spent just five hours total on
each debt, and managed to collect half of them. But you would
have sunk $150 into each successful collection. Plus, there’s the
opportunity cost: $150 worth of time you haven’t spent in growing
your business. So the net loss is $300, and probably more if
you’re a profitable business that gets a good return on your
people’s time.

But if you refer your delinquent debts to a collection agency
for $75 each, and they collect three-quarters of them, you’ve
invested only $100 per debt collected. Once you factor in all the
money from all the debts the agency collected for you that you
couldn’t have collected on your own, the return on investment is
huge. That’s not even counting the saved opportunity cost, or
all the stress you’ll save yourself and your associates.

In the end, your small business has to focus on doing what brings
in the money: your core business. Leave your taxes to your
accountant, your office repairs to your building manager, and
your collections to your small business collection agency.

Writer's Resource Box:
Steve Austin is a regular contributor to Collection Agency
Information (http://www.collection-agency-information.com),
a website with articles on choosing a small business collection
agency, along with reviews of agencies, with links to their
websites.

Collection Agency Secrets for Collecting on Bad Debt
Copyright © 2005, Steve Austin

Getting worried that one of your clients, customers or patients
will never pay? Have you given up on a customer who's essentially
said he won't pay? Congratulations--being stiffed by a customer
or patient is a milestone in the growth of a business or medical
practice. But even the most hopeless of bad debts can sometimes
be collected—collection agencies have been doing it for years.
Here are six of their secrets.

1) Don't Just Call, Write.

According to a leading collection agency, you're much more likely
to collect on bad debts when you send a series of collection
letters. Deep down, you probably know why collection letters are
better. It's the same reasons that would make you uncomfortable
placing such a call in the first place: 1) if a debtor knows why
you are calling they will avoid your calls; and 2) if you do get
them on the phone they will most likely have a bad attitude, or
just make excuses like 'the check is in the mail' to get you off
their back.

2) Don't Ask If, Ask When.

This leading also recommends that you try to get your debtor
to set a date for paying you back. The people who owe you money
may have been saying to themselves that they will get around to
paying you any day now. But tomorrow never comes, which is why
you need a specific date. When you call, start by asking to be
paid today, then negotiate from there.

3) Be Mice.

Courtesy is important because: 1) it lets you keep the moral
high ground; 2) it makes it likelier that you can establish a
cooperative relationship with the debtor for getting the debt
repaid; and 3) there are very strong laws against harassment in
the collections process and you do not want even to approach
their limits.

4) Be Cooperative

Remember: you and your debtor have one thing in common: you both
want this debt to go away. In particular, you both want you to
stop having to make all these calls and send all these letters.
With that shared goal you and your debtor can work together to
create a repayment plan. While a repayment plan may not be what
you had hoped, it's better than holding onto a bad debt.

5) Know The Value Of Your Time

The one thing that is probably keeping you from collecting on
your supposedly bad debt is your fear that the time you spend
collecting the debt may not be worth whatever you will recover.
This fear is justified; your time is valuable and maybe it would
be better spent on getting new business.

But don't just let this fear linger in the back of your mind,
fighting with the little voice that says you want your money.
To get a rough idea of how much time you can afford to spend
collecting the debt, and whether you have the time to do it at
all, sit down and write out a rough estimate of the value of your
time, the likelihood of collecting, and the amount you are owed.

For instance, let's say you are going to assign this task to an
administrative assistant whose time is worth $15/hour. The debt
is $1000. It is owed you by an old customer who is three months
behind but has never been seriously delinquent before, so you say
you have a 50% chance of getting the money, making the value of
the collection about $500.

You divide $500 by $15 and find that your assistant could spend
33 hours collecting the debt before it lost your company money.
However, you'd probably still feel a little unsure about whether
it was all worth it. Your feelings would be correct: there's
still the opportunity cost of all the work your assistant won't
be doing to keep your business moving. To be safe, you can also
estimate the opportunity cost at another $15/hour, which means
you can only really afford to have your assistant spend half as
much time, or 16 and a half hours. If you've already spent that
much time already, it's time either to call it quits or call in
the professionals.

6) Get A Collection Agency

The one secret the collection agencies know about collections
is the value their services deliver clients. Unfortunately,
businesses do not usually agree to write testimonials for their
collection agencies or even recommend them to a friend. If you
didn’t know that there are small business collection agencies
that will collect your bad debt for under $20, you have to admit
that leaving your collections to the pros is a pretty good
business secret. In short, you don’t want your bad debt to cost
you twice: once when you lose it, and again when you waste a
lot of your or your people’s time going after it. Going with
a collection agency can help you avoid either outcome.

How To Avoid Medical Collections
Copyright © 2005, http://www.let-no-debt-remain-outstanding.com, Steve Austin

Medical Collections True Tales: Confessions of a Dental Debt
Deadbeat

Medical collections are costing doctors millions. Here are the
secrets of why patients don’t always pay their bills, from a
real-life deadbeat.

With medical collections costing doctors millions upon millions
of dollars in unpaid bills and collection fees, many people have
just one question: Who are these people who are trying to stiff
the doctors who delivered them from great physical pain (or the
flu, hypochondria, not-so-white-teeth, or a nose that didn’t look
enough like Brad Pitt’s)?

Well, I’m here to tell you who these people are, or at least some
of them.

They’re me.

Yes, I admit it: I left a dentist’s bill unpaid for three months.

OK, so dentistry isn’t technically considered "medical," but it’s
the same situation: a doctor left in the lurch.

Why did I do such a horrible thing, especially when I, a small
businessperson myself, know how difficult unpaid debts can make
cash flow, and how it could very easily make me persona non grata
in that office?


Why Medical Collections Happen
Or, Possible Reasons for Me Being a Deadbeat

Here are reasons commonly advanced for why people like me might
not pay a doctor’s bill.

They don’t have enough money, plain and simple. After all, if
they couldn’t afford insurance, they probably are going to have
trouble with the bill.

They don’t care about the poor doctors and either don’t know
about or don’t care about the potential for damage to their own
credit ratings.

They are chronically lazy, stupid, or just don’t know what
they’re doing. OK, the terms used aren’t quite that specific, but
that’s the general idea.

All of these possible reasons why a patient might not pay could
be pretty discouraging for a practice looking to get the money
it’s owed. After all, there’s not much even the best doctor can
do about a patient’s poverty, venality, or fecklessness.

But is there really so little hope for collecting on medical
debt?


Why Medical Collection Isn’t Necessarily So Hopeless
Or, The Real Reason I Didn’t Pay My Dentist’s Bill

I just signed and mailed a check for my outstanding dentist’s
bill. That just goes to show the situation isn’t so hopeless
after all, doesn’t it? Here’s at least one case of a healthcare
practice getting its money back., and after three months at that
No, my financial situation did not improve dramatically, nor did
my slothful ways correct themselves.

Wondering what the dentist did to make me pay? Plead? Cajole?
Shame? Threaten to put the tartar back?

Actually, the dentist didn’t do anything, and that’s the problem.

Here’s what happened: I remembered I had the bill to pay.

I had forgotten ever owing the dentist money. Since I wasn’t
expecting the dentist’s bill, unlike all the bills that come
every month, it got lost in a pile of credit card offers, appeals
to help save trees being cut down to make paper, and news about
really great products for writers. The follow-up letter reminding
me to pay met a similar fate. It probably didn’t help when I took
a trip to Las Vegas and then threw away the junk mail en masse
when I got back.

I finally remembered the bill when someone asked me to write an
article about medical collections. Sure enough, the follow-up
letter (though not the original bill) was there in the pile of
newsletters and friendly reminders from various businesses to
schedule this or that appointment.


The Moral of the Story

If you are a patient, make sure to check your mail for letters
from the doctor’s office. If you’re running a healthcare
practice, follow up with your patients who have outstanding
invoices—a phone call is preferable, since it’s less likely to
get lost at the bottom of a pile of correspondence.

Don’t have time for that? Worried about the legal issues of
collection law compliance? Don’t let that stop you. Go to a
company that specializes in medical collections and accounts
receivables management for healthcare practices.

It’s not about "putting debts in collection" anymore. Many of
these companies offer everything from sending out a few polite
phone calls and letters to end-to-end accounts receivable
management. None of this has to impact your patients’ credit
rating or cost you a fortune.

Your office can go back to healing people. Isn’t that why you got
into this business in the first place?


Small Business Debt Collection Laws
Copyright © 2005, http://www.let-no-debt-remain-outstanding.com, Steve Austin

In your small business, debt collection laws will eventually
become important, as your debt grows and some clients do not
pay. To collect small business debts legally, you must send a
written notice that collections have begun, within five days of
first contacting the debtor for collections. The letter must
include dispute instructions.

Small Business Debt Collection Laws Forbidden Practices...
-----
Collect any amount beyond the actual debt, unless you really can
do so legally.
Continue collections on a debt if the debtor has disputed the
debt, unless you provide the debtor with written proof.
Continue contacting the debtor if within 30 days of first
contact, the debtor disputes the debt.
Credit a payment the debtor has made to a non-disputed debt to
a debt the debtor has disputed.
Deposit a post-dated check before the post-date.
Small Business Debt Collections Laws: What You Can't Say
Give a false name.
You are an attorney or government representative, if you are not.
You have an attorney working for you or that you are going to
assign the case to an attorney, if you really do not.
The debtor has committed a crime, unless you are 100% sure
they have.
You work for a credit bureau, if you really do not.
The debt is more or less money than it actually is.
You are sending or have sent legal forms when you really did not.
You are sending or have sent papers that are not legal forms,
if they really are legal forms.
The debtor will be arrested--no one is arrested for nonpayment
of debts anymore.
You will seize, garnish, attach, or sell the debtor's property
or wages, if you do not really intend to or cannot legally
do so (and unless the debt is secured with collateral, you
probably cannot).
You will sue or take other legal action, if you do not really
intend to, or are not legally able to do so.
Small Business Debt Collection Laws Forbidden Third-Party
Disclosures


Never:
-----
Give any credit-related information that is not 100% accurate.
Tell anyone other than the debtor that you are collecting a debt.
Telephone any number other than debtor's more than once.
Small Business Debt Collection Phone Calls


Never:
-----
Call after 9 pm or before 8 am.
Forget to give your name and your company's name.
Call repeatedly or in a way intended to annoy.
Make a collect call.
Make any threats.
Use profane or obscene language.
Leave a message that reveals this is a debt collection.
Small Business Debt Collection Mailing


Never Send:
----------
Postcards.
Envelopes or mailings with any reference to debt collection on
the exterior.
Anything that looks like an official, legal, or government
document, if it is not.


These simple small business debt collection laws guidelines
should help stay with the collection laws.

Robert Paisola: Debt Collection and Call Center Trainer

In this video Robert Paisola, the CEO of Western Capital at www.MyCollector.com will detail the Life Cycle of Debt and WHY PEOPLE PAY THEIR FRIENDS, NOT THEIR ENEMIES!

No comments: