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August 12th 2010 what are we working on now

Thu, 12 Aug 2010 05:03:30 +0100

I only have one thing to say to you . Don't miss next week economic article from a senior economist of the National Bank. It will make a huge difference in you professional life and may even help you out for your 2011 budget consideration .
We also are working on a great article in September for indicators on your commercial credit line interest rate predictor.
Also Strategic vision in the credit management function something all credit director should know ..Don't miss it .

Presently working on for August

Tue, 20 Jul 2010 00:33:23 +0100

Hello all, just thought i would let you know what we are presently working on several great article. A great Article on Fraude in your business coming in at the beging of August or Sooner. Another one is all about employee retention and how to build a proven and tested program ( more towards the end of August ).Obviously we are also working on a great article about the economy which will just provide lots of information another must read. This is just to name a few so stay tune August and September wil be banner month .

Welcome to all NCN Journal people

Sat, 12 Jun 2010 18:18:30 +0100

Hello and Welcome to all of you who have looved at the website www.ncnjournal.com and have linked here to find out more. This blog willlet you know what the editing team and i will be working on for up comming issues as well as possible situation . i will try to update this regularly during the week and tell you what is happening. That way just like the rest of us you will feel , the good , the bad and the ugly that can happen when trying to run a Journal. Also we invite you to comment and add any ideas you may have on upcomming topics or just submit one as well.

Hope you will enjoy.

Alexander J Masny

Chief Editor NCN Journal

I always dreaded hearing "You need to do more with less."

Thu, 13 May 2010 14:26:38 +0100

i Have always dreaded this question for years . Your boss come's in to your office and says ."you have to cut your budget by 30% " this is your contribution to be business. Already Credit and collection is always seen as a cost center not a profit center for the business.
Luckily for me this has happen to me only once. The reason why i believe is that i have always taken the bull by the horn and work very hard to change this perception. Yes there is the classic argument that we help to maintain profitability because we limit the risk and therefore the possible losses. However i have elevated this problem to a new level by actually showing and working with sales to actually be perceived as a lead generation department. The reasoning behind this is it's much easier if you generate lead and pre-qualify then for credit as well. So you can partner up with a credit bureau and a call center our event you own internal team to call potential customer to pre qualify them for sales. That way you become a leads machine that no one wants to cut budget . It's certainly sound easy to do but let me tell you it takes time and skill to be able to get some budget to get this done. What i usually do is find some saving within my budget to start this and usually as sales start to get good leads they become more and more interested. This usually leads to an increase in your budget for this part. Obviously you need to start this while things are good for your business. I have done it when the business was having difficulty but it's extremely difficult..
The rewards if you become proficient at this is huge. Now credit and collection not only saves the bottom line but also generate leads.

For more great information in credit and collections i recommend www.NCNjournal.com

Think of collection agency relationship as you business development effort

Mon, 22 Feb 2010 17:56:00 +0100

The reality is Collection agency relationship needs to be manage like all your customers and suppliers. There are multiple reasons why you need to take good care of your relationship.
1) If you get into a problem situation and you need there assistance. Such as a year end cash push or a big account that you need to find out quickly how it's going to turn out.
Having this relationship helps you get thinks done more efficiently.
2) Developing a good relationship let's you get inside information sometime that can be very precious. Imagine finding before anyone else that the team who has treating your portfolio has just left for the competition. Or that sales people keep coming and going. This is as much an indicator for your supplier or customers. A lot of movement in the sales force usually means a product or service that is not moving or an internal team that can not deliver on the promise of the sales rep. Either i am sure you will agree that is not good news for you .It's a classic sign of a declining performance to come.
3) Even though no one likes to get solicited for work from collection agency, the fact remains you need to keep appraise of the industry changes and method. I see this function more like a business development approach. After all you never know when the next greatest agency will come knocking at your door. Taking the time to talk to then and find out what makes them unique may make the difference between meeting or not your cash target at year end.
I usually make it a point to be direct . Don't waste anybody's time here. tell them if you have business to give to them or not . position the call or the face to face interview early on. if your not in the market for a new agency then say so but always leave a door open. I typically always tell them i have not opening right now but i am looking for who has the next great idea on how to collect. What is their unique value proposition and can they support it or is it just a nice way to sell but they have little substance. Always be correct with your sales people after all if it does workout for them at the agency your interviewing they could find work somewhere else and then call you to tell you they just found what you were looking for. If you play it straight with them they will do the same with you . At least that is what i have found to be the rule.

Also one last thing i always tell them there only as good as their last collection results and that a good relationship works both ways. they need business and i need results.

Controlling your cash is a serious business so make sure you deal with serious people.

Be weary of collection agency offers , they need to be manage just like any accounts receivable ...

Mon, 11 Jan 2010 16:34:05 +0100

One of the worst situation I have ever had the unfortunate pleasure of managing in my professional life is terminating a contract in which a collection agency was granted the right to start collecting clients as early as 90 days. Although 90 days might have been seen as a reasonable delay . However in the industry i was in 90 days was just a little over the norm of 80 days.The collection agency had sold the idea to my predecessor ,which shall remain nameless, that if they start there work earlier they would be much more successful and the company would be only the better for it. Of course they had sold it by reducing their collection's rate by 50%. The problem is when you look at a soft collection cost as a measure of the cash collected the cost is dismal ,anywhere between 0.5% to 2% of cash collected on average for a small to mid size business. So even though you think your are getting a bargain on your more difficult accounts the reality is the proportion of accounts is much greater on the soft collection side.
Lastly i would add very few collection agency have the type of collectors needed to work on these type of accounts. They tend to see customers as a debtor and look at only one short term goal "collect the money at all cost". This has a long term effect on your business and increases customer churn (departure ). There is a difference between Insourcing, Outsouring and Collection agency don't make the same costly mistake.

notice letters are they really working

Tue, 24 Nov 2009 10:31:27 +0100

Have you ever though of how much money do you spend on your monthly statement and/or notice letter. Well you should every activity has to be measured agains it's cash return. Specially with the economic situation many people are receiving them. this means it's intended effect may no longer work as well as before. i am sure if you look at the cost of each letter mutlipled by the numbers you sent this become an expensive exercise if afterwards you have to call the customers anyway. The purpose of the letters was 1) to advise poeple they are late and have them pay 2) to help any situation taht may need to go to a collection agency or worst legal that there is an escalation process and that sufficent time was given to the debtor as to no predjudice him.

Therefore as long as you have some form of escalation notice letters may not be warranted all the time. If you have a collection systeme where you can take notes that once entered can not be modify then you have such a system. all you have to do is document every call to your customer. Although e-mails seem easy to delete they could still do the trick as long as you have the right person.

Do we still need to send a notice letter by mail ?

http://www.accountsreceivablemanagement.com

Alexander's corner

Sun, 22 Nov 2009 23:40:50 +0100

This blog is about exchanging on recent topics within the Accounts receivable sphere .