Accounts Receivable/Collections Tips Part I

Have a mid to small-sized business? Accounts receivable and collection of past due accounts your favorite part of the business cycle? Nah, I didn’t think so. Use some of my 13 years of experience to remove some of the fear and stress associated with this heavier and, often times, more stressful part of running a successful business. And, trust me: being successful in business means you will pay attention to this important piece of your accounting. Wanna fail? Ignore A/R!

Here are a few ideas:

+ Computerize.Smaller businesses can use Quickbooks just fine. Mid to larger sized firms need specialized accounting software that can put a clear focus on A/R.

+ Use reports.Those reports in Quickbooks and systems like MAS are there for a reason. You can quickly spot trends in the way your customers pay - or don’t pay - and then meet with your team to develop ideas to address these trends. You are going to learn a lot about aging, DSO, trending, payment history, how aged receivables impact your company’s worth, who your most profitable customers are, where risks are - and a lot more.

+ Send regular statements.Sounds like a no-brainer, I know. I once had a client who sent his statements out sporadically. Funny, payments often came in that way as well. He was teaching his accounts how to pay this way. By creating a “due date” and sending out regular statements corresponding to those dates you have set a pattern and an expectation. It will weed out a lot of slow pays and late pays.

+ Sales tip: Use “white space” on your statements to promote special products, offers and events. Snuck this one in. It will connect your billing piece of your business with the sales staff - and, trust me, they will like it.

+ Accept multiple methods of payment. If possible, add check-by-phone acceptance to the methods of payment you offer. There is a lot of quality and inexpensive software out there. The more ways to pay = more payments. Sales likes this, too - this is a crossover utility!

+ Speaking of the sales pros - use ‘em.They already have a rapport with your client if they are the ones who sold them. When appropriate have them pick up the phone and make a call. They can always blame it on accounting: “Yeah, it’s those number crunchers over in A/R. They have reports and deadlines. Tell me what’s going on…”

+ Resolve disputes and deductions immediately. Fight the temptation to put off researching a customer’s claim about why they didn’t pay. Address these now! The longer you put it off, the more likely the customer (and you) forget details about what was going on. I once had a client who had to write off thousands in 90+ days accounts receivable in “good faith” because the trail had gone cold on the discrepancies. The customers, although incorrectly, would claim that since the company never cared why would they? And they would also claim it was so old that they didn’t have the originial notes and then refuse to pay. But they wanted to write a new order! Nipping issues in the bud from day one gets payment. It also establishes credibility. Integrity.

+ Never make collecting “We vs. You”.  Collecting is already a tough job. It automatically and subconsciously raises defenses in all of us when it comes to past due bills. Try to add in every call: “How can I/we help you to get the account current?” Then - here comes the hard part - listen! You may hear exactly what you need to fix the delinquency! This makes them feel like you are working with them and not against them. And, if you are smart, you are with them. This translates to a better relationship with your client which translates into more sales.

+ Use late notices.  I know you think people throw them away - and they do! But these letters - differing from the format of a statement - send a clear message to the client that your firm has not forgotten about the account. Even if they do throw it away, they know you know! They have gotten a message even without reading the message. Send letters! 30-60-90-120 days and pre-legal or pre-agency letters.

There is a lot to the credit and collections process. A lot that as entrepreneur or owner you may not have thought about or want to think about. Let me think about it for you. There is a lot more we need to cover. Watch for Accounts Receivable/Collections Tips - Part II.

"Show" and "Tell"

An admonsihment for writers: "Show, don't tell."

An axiom among gurus: "Teach always. Use words when necessary."

Street vibe: "I can show you better than I can tell you."  (Often followed by, "Fool!")

Age-old cliche: "Actions speak louder than words."

Ancient Chinese proverb: "Talk doesn't cook rice."

Among many professions: "Those who can't do, teach."

I get the point. I am sure we can increase the list ad infinitum (add yours in comments below). And... I buy it. I believe it. It makes that identifier go off in my truth detector. Ding! In fact, I want to live by these. I'd like to think I do. No, I mean, I would like to think that I "do". That I am a do-er.

And, of course, here it comes...

But! I am left contemplating today, "Why can't I show and tell?" After all, I learned that in kindergarten. We all know what "they" say about learning things in kindergarten: it's everything I need to know.

After all, I am a purveyor of words. A trader whose wares are ideas. A manciple of communications, if you will (I think I will). Admittedly, I read the dictionary for fun! I am a speaker and a writer. In business I work more on the telephone than with any other tool. So I also buy into the idea that the pen is mightier than the sword, that wise men speak because they have something to say, that a man can be convinced to action by the confidence of a conversation. (I cannot count how many people I have persuaded to turn in a car they were hiding for repossession by a stirring exchange in conversation.)

Here...

Joseph Conrad: "Words have set whole nations in motion. Give me the right word and I will move the world."

Mark Twain: "The difference between the right word and the almost right word is the difference between lightning and the lightning bug."

Proverbs 18:21 "Death and life are in the power of the tongue."

"I would hurl words into this darkness and wait for an echo, and if an acho sounded, no matter how faintly, I would send other words to tell, to march, to fight, to create a sense of hunger for life that gnaws in us all."   Richard Wright

And I read this by the adored Anne Lamott today in Bird by Bird, "We are a species that needs and wants to understand who we are. Sheep lice do not seem to share this longing, which is one reason they write so very little. But we do. We have so much we want to say and figure out."

Since I was a child I have known a part of me that, almost desperately, longs to reach out and connect with other people through the spoken and written word. My whole life path has been a development of communicating through the written and spoken word. Through poetry. Through singing. Preaching. Teaching. Conversing. Praying. Writing. Listening. Reading. Pausing. Gesturing. Talking. Editing. Through writing some more. Speaking. Dreaming. Thinking. Telling. Showing.

M. Scott Peck. I'm a big fan. He taught a lot about reality being revealed in paradox. "Para" meaning along side and "dox" meaning opinion. He showed us in The Road Less Traveled and Beyond: "When you get to the root of things, virtually all truth is paradoxical... to understand paradox ultimately means being able to grasp two contradictory concepts in one's mind without going crazy."

I get it now. I do not have to choose. I do not have to either be a shower or a teller. I do not have to be either a doer or a speaker.

I will show and tell!

Hold the Phone!

http://tinyurl.com/2gyghbx

The article above heralds the telephone as the greatest, the best social network there is. The title alone got the click in me to snap. It registered. I believe it!

There is no substitute for the phone. I simply have to stay on the phone. In all of my past lives (collecting, skiptracing, accounts receivable, credit management, selling) the mantra has been: “Dial for Dollars.”

And it’s the truth.

Back to the basics. Use what works.

And now, as a telephone names sourcer searching for talented people to fill open positions my clients have, the theme is the same: “Stay on the Phone!”

It works. Most good ideas are simple. This one is powerful.

Need to network? Sure… linkedin and facebook and twitter are great! I use them. But get on the phone.

Cold calling? Lately, I have heard a lot of people say it just is not worth the time. I have heard a lot of people say lately they made good deals through cold calling. Maybe it’s a numbers game. But who is right? Well, why aren’t you on the phone?

I once collected bad debt for a funeral home conglomerate. I know, I know. The boss used to ask toward the end of the month if I was at my goal. Rhetorical. When I would answer in the negative he would chide, “Those people aren’t gonna pay from the grave! Call the signers on the note. Jason, get on the phone!”

He was right. Sending past due letters or emails is necessary, sure. I had better be employing every imaginable resource and tool. Emails work for follow-up or blind “Here I am!”  I automate those processes wherever possible and… get back on the telephone.

Once I hear the greeting, the click of the pick up, the world opens up to me. Here is where the years of experience and technique meet with art in a single moment. It really is staggering. Have I gotten so familiar with it that I gloss over it or discount it?

Here’s one. It’s the first time I was looking for a car that the borrower had not paid on in months. He had been hiding the unit. My boss simply asked, “Did you ask him where the car was?”

I didn’t ask. She schooled me, “Jason, you had him on the phone. What was he going to do to you? Hang up? Find out where our collateral is. Call him back! Now.”

Calling back was worse than calling at all. But I am a pretty quick learner and I got it. I was learning that using the phone and asking the right questions, with the right pauses, yielded the right information. That yields dollars! It worked 13 years ago when I first learned this. It worked today!

I’m putting a sign in my office: “Hold the Phone!”

We are Literally Star Dust

When the “Big Bang” occured some 14 billion years ago, the only two elements created were hydrogen and helium.

Yet there are over 100 chemical elements. Where do they come from?

We know today that they are forged in the nuclear furnaces of stars, scattered about in exploding supernovae.

Oxygen, chlorine, sodium, potassium, calcium, nitrogen, iron, carbon… all heavy elements are created and released when a dying star explodes. Supernovae eject these into galaxies and around other stars and planets. Eventually they coalesce to form you… and me.

So everything in your body, in my hands typing right now, what comes together in our brains to create “mind”, all came from a star. A sun.

We are quite literally stardust. These are not theories. This is law.

Granted, it is poetic. Somewhat magical even. But it is mathematical, physical and chemical axiom.

So next time we look up at the night sky and stand in wonder at the stars and galaxies, we are literally, undeviatingly, completely and wholly, the Universe Itself looking back on Itself and staring in awe at Itself.

We are stardust. We are the Universe. We are whole.

I am never broken!

I may be bruised. I may even hurt. But I am not broken. I am whole.

Some Words...

ALACRITY 1. Cheerful willingness; eagerness 2. Speed or quickness
VITIATE 1. To reduce the value or impair the quality of 2. Debase
SUSURRUS 1. A soft whispering or rustling sound; a murmor
SOIGNE (swan-YA) 1. Showing sophisticated elegance; fashionable 2. Polished
BAILIWICK 1. One's particular area of activity, interest or authority

EFFUSIVE 1. Unrestrainedm or expressive in emotional expression 2. Overflowing

I Desire!

We are not "supposed" to have desire. It is an expression of lack when we are full as we are. We are really to just "be".  Yet, this journal entry I found from October 23, 2005, is more of a prayer or a form of poetry. I read it tonight and fell in love with an old self that wanted to be different than he was that chilly and rainy Sunday. I know tonight I am. Here it is:

"Desire.

It is my desire to move forward. It is my desire to gain wisdom and to gain understanding. It's my desire to love myself wholly. It is my desire to be spiritual, to have spiritual authority. I desire to lead. I desire to communicate. I desire and I have intention to meet people who are healthy for me, who synchronically fit into a network that "I" am developing.

I desire to write.
I desire to read.
And I desire to write more. To publish. To teach. To record. To disseminate. To read and write some more.

I desire to read more: poetry, essays, great literature, the WORD of God, news, independent authors, plays, even current fiction... to read ME, to read nature, to read people, to read the water and read the clouds. Oh, to read a child!

I desire to sing. Loud.

I desire to take photos. I desire to travel. I want to interview fascinating and engaging people. I desire to hear your story. I long to commune with spiritual people and beings. I desire to learn, to engage the mysterious, to unturn more and more and even more stones - boulders and mountains even. I will unturn a mountain. I desire to study language, read the dictionary for "fun", board a military vessel, run my fingers across the edge of aging manuscripts, to study the lines of a dying man's face. I desire to feel the music beat hard in my flesh.

I desire, ever increasingly, to be more fully alive and wholly present in every moment that I step into.

I desire to live."

Sometimes reading over an old journal entry is the best gift I get. Do yourself a favor: WRITE! BLOG! SHARE!

A Thimble Full of Ocean?

I once read an analogy for taking in the spirit world. Paraphrased, it goes like this...

If I go to the ocean with a thimble, I will only be able to leave my encounter with... a thimble full of the sea. If I approach the water with a gallon bucket, I carry away a gallon.

Of course, the ocean, the water, always symbolizes the spirit. It has in many spiritual traditions the world over. The vessel? I am the vessel. If I go to the spirit world with a thimble-sized attitude, then that is what I will get: a thimble-sized spirituality. But if I approach this vast Spirit with an empty heart I can come away full of God.

Do I go to God with an empty heart? How hungry am I? Do I approach with my own ideas fixed firmly in place? Or, am I malleable, openminded?

Am I tired of the limits I impose on my own spiritual experience? I alone choose how I encounter the ocean. I encounter the ocean alone.

Will I be satisfied with one visit? Will I fill up, go out into the world, and come back for more?

"Enough shovels of earth—a mountain.
Enough pails of water—a river"
-- Chinese Proverb