Protecting The Company Credit Against Scammers And Frauds

Scams have evolved in complexity, and have become more devastating to people and companies. The increasing sophistication of scams is also tied with the advancement of technology. Many companies have incurred debt, and had their credit score ruined by scammers. Protection from scams and frauds could very well save the business from being scuttled by such malicious practices.

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First things first. Business owners should know the scams that target their businesses, and how these are executed. A good example would be text messages that employees receive requesting vital information about the company. The identities of these text message senders should be verified, and approached with utmost caution and scrutiny. Company management should also warn their employees about giving certain information online to websites.

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Business owners and management really have a big role to play when it comes to the safety of their companies. From the start, rules and regulations have to be put in place to protect both their companies and their employees. The only time company employees can share information is when the party with which they’re exchanging information has done similar transactions with the company in the past.

Business owners should also make sure that their internal systems are secure. Passwords to their computers and their websites (if they have any) should be changed at least twice a year.

All these can help protect a company from fraud and scams, and ultimately lead to a favorable credit score.

Brennan & Clark, a member of the Commercial Collection Agency of the Commercial Law League, is a business collections firm that offers world-class service.  Read more about debt collection and the industry here.

What Businesses Should Know About Credit Extensions

A lot of companies extend credit to their customers with the idea that this will help them gain more business. While extending credit may seem like a good decision for some companies, it is not always the case.

Businesses like retail stores, healthcare providers, and transportation services require straight cash transactions for their rendered services. But other business types pursue extended credit. Offering credit can get customers to spend more which can turn into increased sales. It can also establish healthy company-customer relationships.

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Many businesses offer credit in hopes that they can sell better than their competitors. But offering credit can bring more losses than gains for some companies, especially with startups and local businesses. Credit can cost the company money. When a seller offers credit, the customer is using the product they have on loan, but the company gets nothing from it until they are paid.

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When companies offer credit, they assume that the customer has the intention and ability to pay. They look at customers as blank, clean slates who can pay on time. But often, customers take full advantage of the credit, causing the company to lose money. Being aware of a customer’s credit rating and history can be a great way to know about their intentions of paying. Offering credit is not always bad, but it could cause damage if it is given to the wrong customer.

Brennan & Clark is a collection agency that helps businesses get profit through customized receivables support solutions. More about the company’s services here.

How Debt Buying Works

In the 1980s, the savings and loan crisis significantly affected the US economy.  Banks were shutting down at an alarming rate, with the Federal Deposit Insurance Corporation receiving the assets of the banks to compensate for the expenses incurred in repaying the depositors of closed banks.

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The assets they obtained were then offered to private and institutional investors willing to buy the properties of the closed banks.  The Resolution Trust Corporation then conducted auctions to allow different organizations to bid blindly – the bidders were not allowed to know, let alone evaluate, the assets beforehand.

This started the debt buying industry, leading to the establishment of many debt buying firms.

When creditors decide to sell off debts, they create portfolios that categorize these debts into fresh debts (accounts that are up to six months old), primary debts (up to 12 months old), and secondary and tertiary debts (up to 18 and 30 months old, respectively).  These sorted debts are subsequently marketed and put up for bidding among sellers.

The buyer of the debt then decides on whether to directly collect from the debtor, hire a debt collection agency, resell a fraction of the debt, or to do a combination of any of these.

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Brennan & Clark is a business collections agency, providing customized receivables support solutions to eliminate credit losses for businesses.  For more information about the firm, visit this blog.

Streamlining the Phone Collection Process

There are numerous ways to collect debt from pledgers. The primary method of reminding them to pay their dues would be invoices and letters. However, those pieces of paper don’t always do the trick. That is why the next best thing to do is to take to the telephone and talk to debtors.

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The great thing about the telephone-based collection is that one doesn’t need to travel long distances just to communicate with a client. It’s cost-efficient, time-saving, and energy-sparing. However, before engaging the other party, some techniques and maneuvers need to be employed so that the debtor won’t be intimidated and a sense of responsibility would be instilled, instead.

Before talking to the client, preparations must be made first. This means that the collector needs an attitude shift. He must also research about the debt and the history of the debtor, decide in advance if accepting an amount less than the full payment is acceptable, and determine when would be the best time to call. During the call proper, one must make sure that they are talking to the right person. Then the collector should ask for the full payment. What follows is waiting for a response. Never break the silence because the longer the silence, the greater the pressure that is exerted on the other party. One should listen to the debtor intently as well because clues on how to motivate him to pay up will be found in his speech.

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Brennan & Clark helps organizations establish a well-defined goal for their collections, evaluate their internal procedures, and implement changes that will make their collections strategy more efficient. For more on debt collection, click here.

Leveraging Credit To Your Advantage Through a Good Credit Policy

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Credit has been one of the most effective ways to attract more customers to a retail business. The appeal of buy now, pay later enables customers motivates them to purchase while increasing their buying power significantly. Merchants also benefit from ensuring a captive audience; customers can make big purchases immediately rather than waiting, which could increase the likelihood of them taking their business elsewhere.

However, credit comes with risks. Because no cash is received, businesses take in a temporary loss every time they sell with credit. This can become really problematic when customers fail to pay on time. The tempting allure of credit sometimes often snags truly irresponsible buyers who end up purchasing beyond their means.

Because late-paying or nonpaying customers can interfere with cash flow, it is important that businesses work toward a credit policy that opens up the customer's buying power without extending credit to every customer that asks.

Here are a few ways to make credit policies work for a business, maximizing its benefits while reducing its risks.

1.Offer cash discounts. Cash flow is one of the most significant ways of supporting a credit policy. Simply offering lower prices for cash payments can inspire more customers to pay with cash.

2.Keep ample documentation of billing. Sufficient records can make each of the credit lines extended to customers easily tracked, ensuring that late payers can be properly identified, and payment disputes immediately resolved.

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3.Have strict requirements and terms for extending credit. Properly set requirements and clearly laid out terms can ensure that credit lines are extended to customers deemed eligible. The additional requirements involved can even discourage more impulsive buyers from buying on credit willy-nilly.

Businesses can also set up a collections policy to deal with late-paying and nonpaying clients.

Brennan & Clark provides businesses with an array of customized solutions for receivables to make quick work of payment collections. Visit this blog for more updates on collecting from customers.

Handling Chronically Delinquent Clients: Tips For Small Business Owners

Unlike most clients that are sometimes late in payments for legitimate reasons, chronically delinquent clients habitually pay late, pay rarely, or in some cases, never pay at all.

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Serial late-payers are the bane of businesses of every size. Delinquent accounts, however, are a particularly serious problem for small businesses. Having enough habitually delinquent customers compromises a small business' cash flow. To make matters more difficult, small businesses rarely have the tools and expertise needed for collecting on delinquent debtors.

The following are some tips for small businesses dealing habitually late-paying customers.

Have a process in place

No matter how small a business is, it must develop and follow a clearly defined set of policies for late-paying customers. These procedures must include details such as payment deadlines, late fees, and frequency of payment reminders.

Note that there shouldn't be a one-size-fits-all approach to all late-paying customers. A customer who regularly pays on time but forgot to drop a check in the mail for the last bill is dealt with differently than a customer who has never paid on time.

Communicate well and often

Businesses must invoice their clients on time, and clients with a history of late payments must be contacted on the date the payment becomes overdue, preferably over the phone or face-to-face instead of through email or regular mail.

Business owners should calmly yet clearly inform a late-paying customer about the overdue bill, ask for his reasons for paying late, and ask him to commit to paying the amount owed at a date both parties agree upon.

Consider hiring a collections agency

If a client refuses to pay or ignores all attempts at communication and negotiation, and his or her account is past due by more than the acceptable amount of time, business should consider hiring a collections agency. Taking a client to a small claims court can be time-consuming and costly, whereas collections agencies take care of the legwork when it comes to chasing after late-paying customers.Collections agencies allow businesses to get on with more pressing matters while recovering delinquent debts.

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Collections agencies are typically paid either a percentage of the debt recovered or a standard amount of commission for certain types of debt. Others charge monthly rates, while others offer the same services for a flat fee.

Brennan and Clark offers customized account receivables support solutions that eliminate credit losses. To learn more, like this Facebook page.

Surviving Interruptions In Cash Flow

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Among the most important aspects of running a business is cash flow. Often, businesses rely heavily on cash flow to fund their operations. Any interruption in cash flow can gradually imperil a business' ability to stay afloat to cover costs.

Some events can cause a partial or general interruption of income, and being prepared for these developments and responding appropriately can help businesses resume the flow of revenue.

In some cases, such as natural disasters, income interruption is caused by the full incapacitation of a business' operations. Having the necessary preparations for the disaster can help businesses resume normalcy in operations and thus, restore cash flow in the shortest available time. Business owners should also maintain a close relationship with a bank to open up lines of credit. This would help cover most expenses while the business gets back on its feet.

Outside of disasters, the most common of all sources of cash flow interruptions is a poor credit policy. While it is unrealistic to expect all customers to pay on time every time, it is a sign of poor policy for credit to be extended to customers with questionable credit ratings. A poor understanding of the paperwork involved may also impede the business' ability to deliver invoices and track customer payments.

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Businesses should have a clear understanding of the process of invoicing and have a strategy in place to efficiently deal with late-paying or non-paying customers to prevent problems such as these from growing out of proportion.

Drawing from more than three decades of industry experience, Brennan & Clark assists businesses in enhancing their existing collections strategies in a way that suits their needs. For more on the importance of maintaining cash flow, visit this Facebook page.

The Pros And Cons Of Extending Credit Terms

Credit terms can significantly affect the cash flow of businesses. Hence, it is a must for both big and small businesses to have established credit terms. One of the most common dilemmas concerning credit terms is whether they should be extended. Here are some benefits and drawbacks of extending credit to clients: 

Pros:

More loyal clients- A business that extends credit gives clients the impression that the company trusts them. Also, clients will most likely appreciate the convenience that extended credit offers because it helps them to be flexible with their finances. 

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Competitive advantage- Other businesses in the market may not be offering extended credit to clients, so companies that do otherwise gain an edge over those competitors.

Increase in sales- Studies show that most customers tend to be more willing to pay more with the knowledge that they can pay later. This results in businesses gaining more clients and gaining sales, assuming that they pay.

Cons:

Unreliable clients- Extending credit may gain loyal clients, but it can gain unreliable ones as well. Businesses will often come across clients who pay extremely late or those who do not pay at all. 

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Cash flow problems- Strict credit policy results to steady cash flow while extended credit terms may disrupt the resilience of cash flow because of unreliable clients.

Insufficient income- Cash flow problems, if not handled efficiently, will most likely result in insufficient revenue. This may force the business to borrow money to sustain operations. 

Brennan and Clark has been providing businesses with quality debt recovery services since 1980. For updates about credit collection, follow this Twitter account.

Business collection agencies: Choosing the right one

On occasion, hiring a business collection agency is a necessity. This is mainly because business owners have a bulk of responsibilities, and handling delinquent accounts can be physically, emotionally, and mentally draining. However, while many business collection agencies deliver, they are not managed and ran equally. That is why it is important to be meticulous in choosing from which agency to seek assistance. Below are some points to consider when choosing the best business collection agency:

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1. Research

Business collection agencies usually have specific fields of expertise. For instance, some agencies deliver remarkable results from large businesses, while others excel in small business or home-based enterprises. Knowing the type of agency and their most common business dealings can be utilized to the business owner’s advantage.

2. Asking about “skip tracing”

Owners of delinquent accounts could skip town, making it much harder for businesses to collect their dues. In order to prevent this, good collection agencies use what is known as “skip tracing.” By accessing several databases, they can track down debtors who have not left any forwarding address.

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3. Agency insurance

Despite all the research findings, there will be times the collection agency will act aggressively, making the debtor feel that the collector acted in bad faith. In this instance, the debtor can sue. Acquiring proof of insurance will ensure the business owner will not be held liable for hiring the agency.

Brennan & Clark is a business collection agency that has been operating since 1980. A member of the Commercial Collection Agency of the Commercial Law League, the firm offers unparalleled service and the most comprehensive guarantee in the industry. Know more about the company here.