Collections - Are you tough, or are you spineless?

"Cannibals prefer those who have no spines." - Stanislaw Lem.

Whoa! I hope that got your attention this Monday morning! What exactly could that mean, in reference to collections? Cannibals prefer those who have no spines....? Debtors can be likened to cannibals. They are a business, just like you. But yet, you are allowing them to suck the life out of your business! "Wait", you say, "I'm not allowing them to, they just are!". Do you think your debtors are not paying any of their creditors? Absolutely not! They couldn't possibly stay in business without paying ANY of their creditors. Whether it be the electric company, the telephone company, or their supplier with the strongest credit and collection policy, they are paying someone!

Give them a reason to put you on their list of creditors that they have to pay to survive! How? By having a clear-cut collection policy, and following through! Here is a list of things (in no specific order) that you can do to keep from being cannibalized by your debtors:

• Have clear-cut collection policies, and stick to them. (Also make your people stick to them)
• Do not make empty threats. It is better to not threaten at all, then to threaten and then do nothing.
• Use your collection agency to their fullest potential. If your agency doesn't give free ten-day demands, find one that does. (We do!)
• Make your accounting staff accountable, so you can know what is going on at any given time with any delinquent customer.
• Make sure everything is documented. If it's not documented, it didn't happen!
• Use the tools that you have in-house to their fullest potential. Place customers on credit hold, place liens, etc. Even if you intend to send them to collections, these practices are good "insurance".
• Lastly: Don't get so personally involved with your customers that you can't call and ask why they haven't paid. It's not personal, it's business!

I know you've heard the expression, "It's a dog-eat-dog world". It's absolutely true. Don't be spineless. Don't be the easy target for your customers who are looking for a creditor not to pay. Don't be the "Peter" that your customers are looking to rob so they can pay "Paul". Paul has a strong collection policy and he sticks to it! Be Paul! Be strong, not spineless!

Happy Monday! Happy collecting! Call if you need us, we are here to help you stay strong!

Neil