Accounts Receivable Management from a Professional Commercial Debt Collection Agency
Channel: Lions and Associates Sales Team Training & Success Building Channel
Date: 13/11/2013

Subscribe to our channel at http://www.youtube.com/subscription_center?add_user=CollectionPros
http://Lions-Associates.com (800) 803-2183 
10 Top Reasons Businesses Fail with Internal Collection Initiatives
No formal policy 
Staff lacks experience 
Lack of manpower 
Lack of Enforcement of Policy
The Customer is Always Right..."I Don't want to Lose Them as a Client" No Client tracking 
Wrong methodology 
Lack of credit reporting 
Waiting too long to outsource problems 
Lack of an outsourcing partner 
When they don't know WHAT to do, they do NOTHING! 

LACK OF POLICY
Folks, in order to do absolutely ANYTHING effectively in your life, there are steps you must take to do so. Can you drink a glass of water, if you have not filled the glass with water? Can you start your car if you have not put the key in the ignition? Would you begin putting your pants on, by first zipping your zipper? Would you begin watering your garden before you planted the seeds? These questions are of course very simple and common sense oriented. However, so is the cash flow process? Without policy, a written scheduled directive of the flow process for an internal receivables staff to execute, how can you possibly believe that your business will succeed? 

Let’s use accounting terminology to bring this point home...Would you send a final demand notice to a client whose invoice is not even due yet? Would you extend a credit line of $50,000 to a company who had dissolved 4 prior business ventures in the past 3 years and simply changed their company name to escape past creditors? If on your aging report you see a client who had a balance due in each bucket from current to 180 days, would you approve credit again on their next order? If a client called you and said YOU ARE NOT MY PRIORITY, I have other vendors that need the money I owe them more then you do, would you continue to act as their bank, just to say you have them as a customer?

Now for some of you these scenarios may seem silly. However in my line of business, they are facts. I have had clients that came to me with no policy. I have clients that had the time to create a policy and send out a memo on the policy, but it was never executed or acted upon. I have clients that had created, and implemented and trained their staff, however it was never enforced. Each individual employee made exceptions to the rules...then I received phone calls from potential clients in desperate immediate need. From an extremely HIGH DSO, to hundreds of thousands of dollars collecting dust, rather than cash flow, sitting in their aging buckets, to clients with a desperate need to find their customers that were giving credit without any prior checkup and suddenly they had disappeared. Sound familiar?