Cash Management Secrets

Proven cash management strategies that improve cash flow, collect past due money, and increases profits in tight credit markets.

What Collections Agencies Don't Want You to Know

If you've been successful in business it's likely your local neighborhood collections agency has come to visit. What about those promises they make to collect, while you only pay for results.

Let's review, I've shared with you how to collect accounts faster, ways to get started with a cash collection system, and literally told you that you don't need salvage firms because they annoy your customers. All this makes sense to the business owner, but really pisses off collections agencies.

Now I'm in the Receivables Management business, not collections, while that's a part, it's not where you profit. Ideally, using what I teach you'll never send away an account for hard collections and that is what scares these local firms.

First, local collections agencies will get you some money, but at what cost? Will the local salvage company annoy your customer, make you look bad, or even collect too little without hope of collecting anymore?

Often these firms will bundle up many accounts, cherry picking those which will generate the greatest profits for the collectors, while your small accounts age. I don't blame them, they are in business too.

Statistically the older your account the harder it will be to collect. Accounts over 120 days, easier by half to collect than an account at 190 days. With accounts at 240 more than three times more difficult.

The problem is, as a business owner, I want as much of my money as possible and to keep the customers who have temporary challenges. In this economy you are bound to have a few slow pays that in any other circumstances would be one-time, every-time.

It would be naive of me to tell you that everyone coming through your door offering collections services is bad for your company. That's why I've bothered to put together these materials for Cash Management Secrets. This kind of education will help you make the best choice for your business.

Extending business credit is different today, perhaps changed forever with the bail out of big banks and tightening of credit markets. You need the tools necessary to get money earlier, and keep the customers worth keeping. Salvage operations won't do that for you.

© 2008 Cash Management Secrets, All rights reserved.

Bob Blackburn provides Receivable Management Solutions for growing industrial and trade businesses nationwide. For more on Cash Collection Methods, visit http://go.jwhco.net/3a6d21

Posted by Bob Blackburn on November 5, 2008 9:59 AM | Permalink

TrackBack

TrackBack URL for this entry:
http://jwhco.com/mt3/mt-tb.cgi/767