Collections Insider

When I was a child in the 60’s and 70’s my parents paid cash for everything. Not because they were wealthy but because they thought if they didn’t have the cash to purchase something they couldn’t afford to buy it. I also remember my parents putting things on lay-a-way. They always tucked money away for a rainy day not in a bank but somewhere in the house. My parents’ credit was perfect and they prided themselves on that. Today they still behave the same way however my mother finally has a credit card realizing she needs it for on line purchases, car rental and the occasional emergency that exceeds the amount of her little stash. My parents’ credit and ability to pay their way is still very important to them. My parents have been able to retire comfortably. They have a healthy financial conscience.

What has happened to the generations that have succeeded my parents’ generation? We behave as though we have a warped financial conscience. Our desire to have what we want immediately keeps us in debt and with nothing set aside for our future. We live off of our credit cards and scramble each month to pay those credit card bills. We mortgage our homes to the max and drive gas guzzling monsters. What has happened to our concern for our future? What has happened to our accountability? How can we sleep at night knowing that if we lost our job tomorrow we would be penniless and unable to support ourselves or more importantly our family? What did we learn from our parents? Do we believe that they denied themselves of the good life? Do we think that we deserve everything we desire in spite of what our bank books says? Do we live for the moment because we’re told “Life’s too short”? Did our parents deny themselves or did they live responsibly.

The real question is, what are we teaching our children? What are we doing to show them about the value of the dollar? If children accept that it’s normal to worry about money and that couples are supposed to fight about spending, what chance do they have for a healthy outlook on earning, spending or saving money? Do we rely on our school systems to teach them how to balance a check book and to save for their future? Aren’t we supposed to be their guides? Is it too late to pull it together and teach them the difference between needs and wants? Is it too late to remind them that they can’t rely on social security to support them when they retire? If it’s no too late for them then it may not be too late for us.

Wouldn’t it feel great to take care of ourselves financially without depending on credit card companies, finance companies and the government? Wouldn’t it feel great to have money saved for your child’s education? I could really sleep well knowing that my retirement years were covered. I want a healthy financial conscience free of fear, how about you?

Jan Conte is the President of Your Collection Solution, LLC, a debt collection agency out of Newtown, Pennsylvania. She has over twenty years experience in the debt collection industry. You can find more of her articles at yourcollectionsolution.com/blog/.

Author: Bethellen Keefe

One of the more common problems with collections in the healthcare practices today are:

1. Not having a proper policy in place for collections. Some practices don’t have Policy & Procedures manuals at all, let alone one that contains collection procedures once an account has become delinquent.
2. Having collections policies in place that aren’t followed. This can be due to several reasons such as turn over of employees. The responsibility has been delegated to someone who is not a good candidate for collections. (It takes a special person.) Employees (as well as the business owner) look at the smaller balances rather than the larger picture and don’t realize the amount of money that is slipping through the cracks. Or the employees just don’t care, after all it’s not their money lost. Your patients will react to your billing depending on how you train them to do so. If you’re lax about their debt, why wouldn’t they be? In many cases the debt gets written off if they wait long enough. Or at least they hope so and take their chances.
3. Not knowing when it’s time to send to an outside collection agency. The older an account becomes, the harder the debt becomes to collect and the less it’s worth. Agencies offer a lot of advantages and incentives for your patients to pay their bills that a practice themselves can’t give. In addition to delinquent accounts, collection agencies can help an account from becoming delinquent. They can run credit reports to see if a patient has the ability to pay a long term payment plan or for any credit that’s been extended for healthcare as well as other types of businesses. (Just like the company you leased that x-ray machine from did.) They also have skip trace resources to find your patients after they’ve moved. In many cases getting unpublished and or cell numbers. As we’ve delved further and further into the electronic age, this is an issue that the skip trace industries are addressing more feverishly than ever.

Agencies instill a sense of urgency that a practice who’s allowed a debt to remain delinquent for more than 90 days has failed to do. Especially when they only communication with the practice has been through letters. A good agency always calls. They handle the debtor with a personal and professional manner while all along putting the debtor in the position to act on resolving their debt and being made aware of their options and the consequences they may face if ignored. It’s much harder to for a debtor to ignore an effective collection agent, than it was to throw away the bills. Many debtors fear that once the account has gone to a collection agency that it’s already affected their credit. The debtor gets their first collection agency letter and all of a sudden they’re eager to pay the debt to avoid their credit being affected in a negative manner or as many of the debtors think, to get the credit report cleared. Many agencies, if they report to the credit bureau which most good ones do, don’t do so until their efforts have failed to resolve the account. So until then, the agency is just another department of the client they’re collecting for. But many debtors don’t realize that. Let’s keep it that way. Agencies usually have the ability to report to the main credit bureaus. This may help in the future when that young adult who thought they were bullet proof when they were younger and irresponsible, have to now pay for the consequences of their past. Now that they want to get a mortgage, car or any type of credit extended to them, they may have to resolve your debt to do so. Some debts have been resolved 5yrs down the line in cases such as this. Agencies also have the know how to help assist in recovering NSF payments. Did you know that many state laws allow you to sue for four times the amount of the check and any collection fees incurred, with little effort involved on their part?

There is so much that a good agency can provide your business. A good tool is to get signed up with an agency ahead of time, and to forward the delinquent accounts in a timely manner as they come up. Different agencies have different requirements as far as minimums, sign up fees, if they report to a credit bureau, if they offer different payment options etc. Make sure they follow the FDCPA and are professional and courteous. An agency with a health care background is also a plus. These are all things that should be looked into when choosing an agency that would work best with you and your business. Medical providers are well aware that there are procedures that are best left to a specialist. The same goes for collections. At a certain point it is best to let a company that specializes in debt recovery handle these procedures as it’s what they do best.

About the author: Bethellen Keefe is the owner of Alpine-BAK, Inc. collection agency based in Coral Springs, Florida. Visit her online at www.alpinebak.com.

In this article, I’ve listed eight highly effective techniques that successful businesses use to collect past due receivables before placing them with a collection agency.

1. Be prepared to discuss past due balance with debtor/customer

Be prepared when you make the call or speak to the debtor/customer in person. Have the debtors file or screen in front of you. If you sound or appear unprepared you will give the debtor/customer the impression that the balance due is unimportant to your office and the debtor will not take you seriously.

2. Listen to the debtor/customer

When calling the debtor/customer about their past due balance, identify yourself, state the reason for your call and then be quiet. Allow the silence to work its magic. The debtor will eventually speak and will continue to speak if you do not feel the need to fill the silence. You will get more information than you need. Use open ended questions. Do not interrupt the debtor, let them spill the beans. Long pauses are crucial. Repeat back what the debtor has shared with you to confirm your understanding.

3. Never take anything the debtor/customer says personally

When debtors/customers are unable to pay their balance they can become embarrassed, fearful and angry. Understand that these emotions and their comments have nothing to do with you. The debtor/customer may feel desperate and may lash out.

4. Ask for a payment date

Ask the debtor/customer when he/she will be paying their balance due. Tell the debtor/customer to call you on that date with their check number and ask how it was mailed, i.e. first class, priority or overnight. Keep a calendar of the promises to pay. Follow up with those debtors/customers that do not contact you to make sure payment has been mailed.

5. Set up a payment schedule if necessary

If a debtor/customer has a legitimate financial or family problem that is causing them to be delinquent tell them that you are sorry that they are experiencing difficulty and offer a payment schedule. However, do not allow the problem to become yours. Explain that despite the problem the balance still needs to be paid and you will be happy to set up a payment schedule.

6. Address disputes

If your debtor/customer claims they have not paid due to a dispute with the billing, problems with the service, insurance problems, etc., address their dispute immediately. Be sure to get back to them quickly with a resolution or response. Then ask for payment. If you can’t “fix” their problem you could offer a discount to collect the balance quickly and avoid losing the client. If the dispute is ridiculous and appears to be a stall tactic ask if there may be another problem preventing them from paying. If it’s financial then offer a payment plan.

7. Stop service

If your debtor/customer is not working with you to resolve their outstanding balance do not continue to do business with them unless you have a contract that states otherwise or if the law requires that you continue to assist them i.e medical patients.

8. Know when it’s time to place your claim with an agency

Know when you are beating your head against a brick wall. Access the balance due versus how much time you have put into your attempts to collect the balance due. A reasonable time frame to place your claim with a collection agency is 90 to 120 days past due. Early placement could provide greater recovery results.

You have good paying customers to focus on and dealing with your past due receivables takes you away from them and from making money.

About the author: Jan Conte is the President of Your Collection Solution, LLC, a debt collection agency out of Newtown, Pennsylvania. She has over twenty years experience in the debt collection industry. You can find more of her articles at yourcollectionsolution.com/blog/.

Recently I read “Be a Sales Superstar”, written by Brian Tracy. It occurred to me about half way into this book that the Tracy’s 21 Great Ways Sell More, Faster, Easier in Tough Markets could apply to any and all professions, not just that of a “Salesperson”.

Aren’t we all sales people in one way or another? I run a collection agency. In order for me to get debtors to pay I have to sell them on the idea of paying my client versus another creditor. I have to make them feel that paying my client first is the right thing to do.

Tracy’s 21 Great Ways include committing to your job, believing and feeling you are the best at what you do, building long term relationships, looking the part, behaving professionally always and handling responsibility and objections well. These are skills we all need to do our jobs well and to make more money doing them.

This book is a fast read and I guarantee a worthy one as well.

About the author: Jan Conte is the President of Your Collection Solution, LLC, a debt collection agency out of Newtown, Pennsylvania. She has over twenty years experience in the debt collection industry. You can find more of her articles at yourcollectionsolution.com/blog/.

In many organizations the Sales Department and the Accounts Receivables Department / Collection Department are on opposites sides of the building. Rarely do these departments interact. In this article, I’ll focus on eight areas that can make them a combined team.

The Sales department is considered the front line while Accounts Receivables Department / Collection Department is the back end or “clean up” crew. The Sales Department and Accounts Receivables Department / Collections Department should, and can, work as a team.

We all know that the Sales person works really hard to sell its companies products by pounding the pavement or phones in an attempt to get the potential client to say yes to their product. Most sales are good ones; i.e. the customer orders the product, is satisfied with the product and pays for the product. A small majority of customers for various reasons do not pay, hence the need for a collection department.

When the account winds up in the Collection Department for collection, the collector has to work especially hard to collect payment for a product that has already been consumed or resold and the sales person has already earned their commission on the sale. The fact that it is now considered a “bad sale” can create tension amongst these two departments. The Sales person is confident they did their job and feel that now the collector should do their job, and vise versa.

Here are eight suggestions to help your sales team and collection team work together to keep both ends running smooth and to keep them both thinking about how they affect one another.

1. Get correct detailed billing information. Have Sales persons get complete contact and billing information from the customer, i.e. company’s legal name, billing and physical address, telephone, fax, e-mail and name of contact person.

2. Get a Purchase Order #. Get a PO# if a customer’s payables department requires a purchase order for each sale. Make sure the sales person obtains the PO# before product is shipped.

3. Look for warning signs. Sales person should be mindful of signs that customer may be having financial problems. All sales are not “good” sales, i.e. if the customer never pays it’s not really a sale is it?

4. Get a credit card #. Get credit card number to be kept on file for all purchases. This process ensures customers are paying as they go along and prevents delinquenices. Some companies offer discounts to “fast payers”.

5. Keep a blacklist. The Collection Department should provide a list of delinquent accounts to the Sales Team so that they are aware of who they should be cautious about selling to, i.e. a “Blacklist”. When sales persons visit or receive calls from customer to place further orders the sales person should remind customer that they still owe for a previous invoice and should they pay that first.

6. Share information. A quarterly joint meeting could be held with the Sales Department and Collection Department to keep the wheels running smoothly.

7. Don’t take things personal. Both Departments should be mindful that they are both under pressure to meet their financial goals and sometimes that means having to be a little tough to make that happen.

8. Don’t leave yourself hanging. Don’t extend credit to delinquent customers until they are caught up. Customers worth their salt will understand why this is good business. If they don’t they may not be worth hanging on to.

Reminding yourself regularly of the importance of each department in your company is key to a well run business. Happy selling and happy collecting!

About the author: Jan Conte is the President of Your Collection Solution, LLC, a debt collection agency out of Newtown, Pennsylvania. She has over twenty years experience in the debt collection industry. You can find more of her articles at yourcollectionsolution.com/blog/.

Sometimes you just can’t get in touch with somebody — especially when they seem to owe you money. They moved, changed numbers, etc. Before you go crazy, try these free online tools to assist you with background searches and debtor locates.

1. www.anywho.com Phone and address searches for individuals and businesses. Reverse directory as well.
2. www.google.com Enter your customers/debtors name and any articles or websites containing their name will come up.
3. www.argali.com Telephone directory
4. www.naco.org National Association of Counties. This is a great tool to locate which county your customer/debtor is located for court proceedings etc.
5. www.contractors-license.org This site will verify if a contractor is licensed. It is set up by state.

Have a locator resource that you would like to share? Post your reply with the link to your favorite resource and we’ll use it in our next resources follow-up article.

About the author: Jan Conte is the President of Your Collection Solution, LLC, a debt collection agency out of Newtown, Pennsylvania. She has over twenty years experience in the debt collection industry. You can find more of her articles at yourcollectionsolution.com/blog/.

A common question asked of me several times over – “Should I have a web site for my business?” Not only is my answer a resounding YES, a web site is by far the most cost effective communication and advertising tool any business could have.

If you have a business then you provide:
1. a product
2. a service
3. useful information

Radio and TV commercials are generally too expensive for most small business budgets, word-of-mouth is wonderful for established business but not as effective for newer businesses, and expensive direct mailings usually results in your ad going from the mail box to the recycle bin without ever being looked at.

That leaves us with phone books. Let’s face it – phone books are almost extinct. When was the last time you picked one up and actually used it? And if you actually do get a large number of calls from the yellow pages, think about how much more you could get for a fraction of the cost if you were found online!

Check out this post from a phone book ad agent and what he candidly says about phone book directories.

What is the average age of your customer? Did you know the average online consumer is between 18 to 48 years old? That age gap increases every year too. Consider this: an average 5 to 15 page web site for your business telling the whole world (or maybe just the market you want to target) about your stuff, running online 24 hours a day, every day of the year, professionally managed, updated and optimized for search engines by a professional webmaster usually costs on average under $80 per mo. for small and medium business web sites. Certainly, this cost can run into the hundreds or thousands for mega corporate web sites with large Search Engine Optimization (SEO) firms. But for our small business example, this monthly fee equates to about the price of a daily cup of specialty brand coffee. A fee that can also pay for itself in a very short time too.

So what can you do now?

If you don’t have a web site, look for a professional web designer; more importantly one that specializes in search engine optimization. If you already have a web site, get an evaluation and consultation to see how effective it is now vs. what it could potentially be.

Unless you have lots of time and are very adept to learning web designing for fun, avoid the temptation of the “do it yourself” route to creating a web site. There are so many offers online for “free web site with domain name purchase” etc. that suck people in. You get what they say though, a web site, which later you realize no one can find. Most of these basic web site templates are all about presentation and very little about proper search optimization structure.

As I mentioned previously, a web site should be professionally managed. It should also be updated and optimized for search engines. Change is constant for a web site to remain successful. I also recommend a web site to be professionally built to avoid browser compatibility problems, accessibility problems, and other common issues associated with poor planning.

Proof that Success is Possible

An example of successful web site marketing is Your Collection Solution, LLC’s web site www.yourcollectionsolution.com, a web site I currently manage. Jan Conte estimates that 95% of her new business comes to her online via her web site. Since her web site was optimized earlier this year, her daily calls for new business have gone through the roof. Go ahead and try this search for “collection agency ny”, one of her three markets, just by clicking this link and see the results for yourself.

Owning a web site and having it professionally managed isn’t just a must-have, it’s also a financially sound decision. Let’s face it — if you own a business and don’t have a web site (or a properly optimized one), you can be sure your competition is gradually stealing your business through their own properly built and optimized web site.

About the author: John Kelly of 6×6 Design, LLC, is a web designer and search engine optimization professional. His niche is small business website optimization and consultation. He is also the webmaster and I.T. specialist for YourCollectionSolution.com.

Many clients have asked my why some claims are treated differently then others. I would like to present the answer in two articles. This first article will explains how the claims are broken up into two categories and how they are treated from a regulatory standpoint. My second article will address issues such as why a president of a company cannot be held responsible for the debts of the corporation.

In the collection industry debtors/debts are broken up into two categories; consumer claims and commercial claims.

1. Consumer claims are debts owed by individuals, i.e. John Smith, Mary and Tom Jones

2. Commercial claims are debts owed by a business, i.e. XYZ, Inc., Z&Z, LLC.

Consumer collection efforts are governed by the FDCPA. The FDCPA protects debtors’ rights and provides guidelines for the behavior of the collector, collection agency and collection attorney. All third party collection agencies and attorneys must follow the FDCPA or face fines and or legal action. Collection agencies are required to send a debtor a thirty day demand letter which gives the debtor an opportunity to provide proof of payment, pay the debt or dispute the debt before legal action can be taken. The debtor has the right to request proof of the debt and the agency/attorney must provide proof under the guidelines of the FDCPA. Some of the finer points of the FDCPA are:

The hours in which collection agencies are allowed to contact debtors- no earlier than 8am and no later than 9pm. No time that is inconvenient to the debtor.

Written and electronic Communication- No e-mails or faxes. All written communication must include the mini-miranda, This is an attempt to collect a debt and any information obtained will be used for this purpose. Envelopes cannot show anything that indicates the letter is from a debt collector. No postcards.

Legal Representation- If a collector has been made aware that a debtor is represented by an attorney all communication with the debtor must cease. The collector must work with the attorney to resolve the debt.

False representation- A collector cannot use any false, deceptive or misleading representation or means in connection with the collection of any debt. The collector cannot threaten any action that cannot legally be taken or is not intended to be taken.

Harassment- A collector cannot use the threat of violence or criminal means to collect the debt. A collector cannot use profanity or use language that is intended to abuse the hearer.

To read the FDCPA in it’s entirety go to http://www.ftc.gov/os/stautes/fdcpa/fdcpact.htm.

Commercial debtors are businesses that fall under the following business structure; Corporation, S Corporation, Partnership, Limited Liability Company and Limited Liability Partnership.

If a business is a DBA, sole proprietorship or fictitious or assumed name the debt/debtor is considered a consumer claim and the collection agency must follow the FDCPA.

Commercial debtors are not protected by the FDCPA however the Collection agency/attorney should conduct themselves professionally and ethically when handling these claims. Certain tactics can still be viewed as harassment and could provoke a law suit.

I hope this clarifies things further. Don’t forget to check out November’s newsletter for the second part of this article.

About the author: Jan Conte is the President of Your Collection Solution, LLC, a debt collection agency out of Newtown, Pennsylvania. She has over twenty years experience in the debt collection industry. You can find more of her articles at www.yourcollectionsolution.com/blog/.

When I started my business ten years ago I simply paid $35.00 to file my DBA with the county and I was off and running. A few years later I discovered that this structure was not the best structure for me or for the business from a legal standpoint.

As a DBA or sole proprietor I would be held personally responsible for any mistakes made by the business and I would be held personally responsible for the debts of the business. It was not my intention to make mistakes or not pay the bills but as we all know things happen in business. I wanted to be sure that my home, bank accounts and assets would be safe in the event my business suffered a loss or law suit. I spoke with my attorney and accountant and determined that forming a Limited Liability Company or LLC was best for my needs. Today I rest much easier knowing that I am protected.

We all have different financial and legal issues that can arise with our businesses so choosing the right structure is important to you both personally and professionally. Speaking with your attorney and accountant could save you years of anguish and financial loss. Here is a link
to a wonderful web page that explains the different corporate structures. It will help you decide which structure is most advantageous for you and your business. It will give you a place to start before meeting with your attorney and accountant.

About the author: Jan Conte is the President of Your Collection Solution, LLC, a debt collection agency out of Newtown, Pennsylvania. She has over twenty years experience in the debt collection industry. You can find more of her articles at www.yourcollectionsolution.com/blog/.

Medical/Dental collection efforts can be extremely difficult for both the practice and its collection agency. Setting up policies and procedures for your practice and educating your patients can make a huge difference in collecting or even eliminating delinquent accounts. Here are some tips from my personal experience having managed several dental practices. These tips have been most effective in positive patient relations.

• PPO- Practice must be sure to inform the patient if they are or are not a PPO=Participating Provider Organization AKA In Network Provider, even if not asked specifically and to make sure the person knows the differences.
• Verify Eligibility – A practice must verify that the patient is eligible for the
  benefits that they’re expecting to receive, and to find out ahead of time about any common exclusions to the plan.
• Verification Form – Create a form that has the basic choices of benefit information on it already. Even note the effective date of the policy, some of the common exclusions, limitations, maximum annual allowance, has any of the maximum been used this year, frequencies for common procedures. This way you can just circle, check off or fill in the blanks for what’s relevant. This should also include the patients Plan, ID#, Toll free # and the mailing address to send the claims to or the information needed for electronic claims. Are there other family members covered? Are there any age specific limitations?
  Always note the name and/or badge# of whom you spoke with. Make sure you’re getting the benefits for a participating or non participating office, whatever the case is for this person.
• Financial Policies- Make sure all the paper work is filled out properly. Does it include the SS#? Some people are hesitant to give their SS#, if this is the case, ask them to put down the last four digits. Did they sign everywhere a signature is required? Make sure your policy includes that you may add billing, collection and or legal fees to any delinquencies. This gives you the freedom to do so if you choose, but doesn’t obligate you to do so.
• Patient Registration Forms should include – Address (if it’s a PO Box, keep it, but require a physical address if there is one), Phone #’s for home, work, cell, spouse’s work & cell. What dept. do they work in, and what position? Supervisor’s name. An emergency contact name & #, as well as a name and # for a family member not living with them. Are there any family members already in the practice? Email addresses are very useful these days. (if they have a business card, request one to keep in their file) Who referred them to your practice?

This is the beginning of great communication between you and your patients, and will only result in positive experiences for all involved.

About the author: Bethellen Keefe is the owner of Alpine-BAK, Inc. collection agency based in Coral Springs, Florida. Visit her online at www.alpinebak.com.