Who's But Are You Covering

When it comes to not getting paid for the products or services that you provide, I always ask my students "Who's Ass Are You Covering"? I get blank stares-we all know the look "Deer In Headlights" I would like to ask you that same question, Who's Ass are you covering and then immediately after that ask yourself-Why?  At a minimum here are the top items small business owners spend money on:

- Business Cards/Brochures
- Website,
- Incorporating Services
- Marketing

Here is what we spend time thinking about Sales, Sales and more Sales - this is not a bad thing. It's exciting when you make your first deal, but always take a deeper look at your new potential client do your homework "Cover Your Ass".  Run credit checks, pick up the phone and contact references and inquire about how they pay, contact their bank etc...   

Tip: When contacting banks you might want to say "that you need to verify funds on checking account number in the amount of $10,000 thank you"  if you noticed I did not ask "if it was ok to verify funds on account number" you’re asking for permission will more than likely get a No response every time.  You have to assume that they are going to provide you with the information-you might get some push back but keep trying.

Tip - do not refer to your potential new clients as babe, buddy, honey, sweet heart, brotha, bro, homey; for obvious reasons.

Prior to doing business with your new potential client take 15 minutes to go over your credit & collections policy this way there are no surprises if your new client begins to have problems paying their A/R's on time?  Remember not every sale or client is a good sale or client to have.

Thank You for reading my Blog
Kenneth Grayer CEO/President
Financial Management Institute Inc
Email: training@teamfmi.com
Web: www.teamfmi.com

Credit & Collections Policies vs. Business Plan

Learning to collect on your delinquent Accounts Receivables should be a priority to you when you open the doors of your business.  When individuals make the decision to go into business there is a lot of emphasis placed on writing a business plan but at what point does writing your credit and collections policies become a thought?  Typically when you are not getting paid for the product or services that you have provided is when you spring into action.  This is being reactive not proactive. 

Not enough emphasis is placed on what to do or how to collect from non-paying or slow paying customers.  Organizations such as the Small Business Administration would have you believe that your business plan is the most important document needed to successfully operate your business, which is partially true.  I agree that some sort of business plan is necessary.

Starting and running a business is very exciting and rewarding in the beginning-all the fun stops when you are not getting paid for the product or service that you have provided.  Let's think this through-if your business is suffering then your household is suffering as well?

Now you have to convey to your creditors "I will pay you when my clients pay me" .  The harsh reality is you have taken more of a personal approach with your clients, and you don't want to upset them because they might not want to do business with you anymore.  I can respect the emotional thought process but honestly it's you or them.

 In the start-up phase of your business venture your goal is to go out and market your product or service and chase money latter, sometimes that money you are chasing never comes back to you and the client whom you thought was a "Good Guy" is gone and out of business which can and will soon be you if you don't get proactive.

Don't procrastinate on writing your credit and collections policies.  Thank you for reading my Blog visit us at www.teamfmi.com and subscribe to newsletter


                                                                                                             
Financial Management Institute
Kenneth Grayer
CEO/President
Email: training@teamfmi.com

Professional Collections is not a difficult profession everyone can do this job but not everyone can handle the job. You have to have mental toughness to succeed; experienced and highly skilled/trained collectors reading this know exactly what I’m talking about.

Being a collector or managing your account receivables requires several different skills set. Just because you call on a business that has outstanding receivables does not mean they are going to pay you right away.  All businesses go through tough times and give objections why they cannot pay their contractual obligations.

The primary objectives of a professional collector is to educate the client on the facts, gather as much information from the client/customer and motivate them to make a decision. The decision that some business owners will make is to hang up or simply evade your calls. Most business owners do not default on contracts intentionally, something happened. A professional collector will ask the appropriate questions to gather full & complete information & provide the best possible arrangements for themselves, and the client if they want to continue to do business with them.

Another important factor is professional collectors must use every means available to make contact with their customer in the shortest amount of time. Let’s say you decide to place accounts with a collections agency for a fee if collected is called a contingency account.  Contingency accounts are accounts that are placed with a collection agency by a creditor (That's You) to liquidate their portfolios or locate a business that has relocated and all the information that you have from the client is no longer valid information.  Yes this does happen


Collectors must use appropriate skip-tracing efforts when necessary. When a professional collector has located the business/owner we must ensure that the individual understands the purpose of the call and establish an authoritative line of communication with the business owner.
Being a successful collector requires excellent communication skills; you have to be able to analyze situations, make decisions, manage your time, have patience, use a little finesse, and have a heightened level of focus. The first thing I like to do with a collector is determine if in fact this is something they really and truly want to do. Now that I have a commitment from you, buckle up !!


Q - Are you one of thoughts guys whose wife or girlfriend always says "You Never Listen To Me"? please don't say "NO"- You lying Ass (LOL). Communication is a conversation between two or more individuals. One person listens and one person speaks…It is important to understand that Two people cannot have a successful conversation and accomplish a common goal with interruptions.  Developing communication skills will ensure the collectors’ ability to control a call made or received and increase your earning potential. 

It’s not what you say; it’s how you say it that will eventually get you paid. As a collector you will handle many different telephone calls from business owners who are: frustrated, angry, and embarrassed unless they just don’t give a shit.  During your communications you have to determine what is going to be a motivating factor to getting your invoices resolved. 


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