#collectionlaw

[greenbaumlaw]

How to Write a Demand Letter – Part 1

Recently Parris Trimble, Esq. of Greenbaum Law Group gave a two part video series on how to write your own demand letter. She covers topics ranging from knowing who to send the letter to, to keeping it short & simple and more.

Read the Full Transcript Below:

Hi, my name is Parris Trimble and I’m an attorney here at Greenbaum Law Group. Greenbaum Law Group is a commercial collection and judgment enforcement firm. Today is the first of a two-part video where I’m going to share with you some tips on how to write your own demand letter.

The first tip for today is to know who to send the letter to, and by that I mean we often send it to the accounts payable person but the accounts payable person doesn’t always have the authority to write the check. Send it to the CEO or perhaps if the company has an in-house counsel, send it to the in-house Counsel as well. You wanted to send it to as many people as possible. We have this saying around the office that we always want to get stuff off our desk. So if you send it, it’s on everyone’s desk, and if you have something on your desk you look at it and say how do I get rid of this & you give it to the person who can handle it. That’s the goal there. The more persistent you are the more likely you are to get noticed.

The second principle is the kiss principle, keep it short and simple, and by that simply say “we have not received payment for X please make payment to…” This is really short with no feelings and no emotions. Don’t let them have you play the go fetch game. How many times have you heard “Oh we never received the invoice…” send a copy of the unpaid invoice with the demand letter to cut out that extra step.

And finally, don’t give extended payment terms. Shift the burden over to them. For example, you can say “If payment is not received by X date” maybe 5 or 10 days away, “we understand this as your invitation to…” then you can either say “begin collection proceedings” or “to suspend your account”

Next week, we will cover more of this topic in our post “How to Write a Demand Letter – Part 2.”

Originally published at https://collectionlaw.com on January 15, 2021.

[greenbaumlaw]

Debt Collection in California

Collect bad debt in California. Bad debts are not unusual, most businesses experience some bad debt. Take action. Don’t just hope things will change. Send your own demand letters and make your own collection calls.

When those don’t work, hire a collection attorney to sue now, not after more of the same. If your collection calls and demand letters failed engage us as your collection attorney to begin your collection suit quickly. Bad debts don’t age well. If you don’t hire a collection attorney and the other creditors do, your debt won’t ever get paid. collection agencies don’t sue, they just make more calls and send more letters.

The courts aren’t free. There are court filing and process server costs. Anyone who promises to collect without any court costs are just a come-on. Consider the benefits of either contingent fees or hourly fees for your collection. We’ll send you information on both.

Originally published at https://www.collectionlaw.com on August 13, 2020.

[greenbaumlaw]

10 TIPS FOR COLLECTION CALLS

1. Know who to call

Determine the name and extension of the A/P person once and keep it. Get the email also. If repetitive calls are necessary, be nice.

2. Know how soon

You teach your payment terms. If you call when a bill is 30 days late, you just taught that there are 30 extra days in the payment cycle. Call 5 days after a payment is due.

3. Know when

Afternoon calls get deferred to the next day. Be on the short list for today’s action.

4. Two Views on Content

KISS, Keep it short and simple. No blame! No insults! No emotions! “I’m calling because your account is overdue. Will you pay this now?

Chatty. Listen without blaming and keep the conversation going. Discover the facts or build rapport or become less threatening.

5. Be Prepared to Respond

Anticipate the usual excuses. Have the responses ready. For example, if told they didn’t receive invoices or billings, have pdf’s ready to email immediately while you are on the phone. Have your statements and A/R balance report handy for past payment application responses.

6. Payment Alternatives

Send an email with direct deposit and wire transfer instructions to an account in one of the big chain banks. Describe payment by going to a branch of your bank to deposit. Do you take credit cards? PayPal? Venmo? Zelle?

7. Pick Up a Check

FedEx, UPS and others will pick up, usually same day if called early. If you are told they have a check for you, ask if you can have (FedEx) pick it up that day. If yes, call for a pick up. Eat the cost to get the money if the payment is big enough.

8. Speak Through a Smile

Few people like collection calls but most people like to talk to friends. They smile when talking to friends. Treat each debtor as your friend and your attitude will come through your voice. People pay more attention to friends.

9. Keep a Log

Know when you called, sent letters, what was said, who you talked to and what was discussed. This may not be important now but it could be very important in the future.

10. Make Every Call a Success

You won’t collect on every call so don’t set yourself up for feelings of failure. End each call with an assessment of what you gained from making the call. You can almost always find something positive, even if it is just knowing you must move to the next level.

Originally published at https://collectionlaw.wordpress.com/ on June 22, 2020.

[greenbaumlaw]

Measuring ADO for Creditors

Most business-to-business debt is monitored and collected on a monthly billing cycle.  Most vendors send invoices with payment terms detail such as “net 30”,  a specific date or EOM (end of month).

Sending Out Billing

Generally, open accounts are billed at the end of a month for the monthly balance owing.  Creditors teach their customers that they will wait 30 days from statement to get paid. Some Creditors bill on an invoice basis but send an EOM Statement of Account.  The terms on the Invoice contradict the EOM statement.

ADO (average days outstanding) is a key metric used in assessing cash flow and in collection of accounts receivables.  But from when do you start ADO?  From invoice?  From EOM billing?   It goes without saying that the faster your company gets paid after the sale is shipped, the better your cash flow.  A big problem is that frequently the accounting department, the sales department and the finance department define ADO differently.  Best Practices requires that everyone in the company work from the same definition of ADO.  

But the decision on how rapidly an invoice or bill is sent isn’t always easy. Who makes the decision varies from company to company.  It seems frequently dictated by the technology being used for billing.  Or the task is done by an Account Receivable Department that wants a specific date so they can balance workflow or human resources.

If the finance department wants an ADO from date of invoice, the technology may resist specific billing in favor of account wide billing.  The “System” may not be  “programmed” for promptest payment.  And if “The System” is programmed to measure ADO from the EOM billing, that may add from 1 to 29 extra days to the ADO.

Critical Event Billing

Critical event billing is superior for sales that aren’t repetitive.  A billing is generated when a big sale is made.  That becomes day one.  

Start with just the first step.  Conduct a company-wide survey of how each department views the money that is owed. Did it hit their sphere of influence on the day of the order, the day of the sale, the day of the shipment, the day of the invoicing or the EOM?   If you find variance, management must make a decision and implement a policy.  Good Management about all interested parties being on the same page when using a metric of ADO as a cash management technique.

Originally published at https://collectionlaw.wordpress.com/ on September 24, 2020.