Tip Of The Month - February 2007

TIP OF THE MONTH - FEBRUARY 2007

Getting What's Due You... And Soon

Deteriorating economic conditions have an adverse impact on collections. According to the Commercial Law League of America, the portion of receivables you can expect to collect, based on the age of the account is as follows:

Current 98.2%
1 month past due 93.1%
2 months past due 85.4%
3 months past due 73.1%
6 months past due 50.0%
9 months past due 40.4%
12 months past due 25.0%
24 months past due 10.5%

The data certainly suggests that firms must pursue vigorous collection efforts to recover most of their receivables. Also, direct on-site visits to customer’s premises may increase the odds of payment plus your collection personnel may be able to make an assessment of the customer’s payment ability.

An illustration of what we’re talking about? Perhaps an Abo and Company reminder we sent out will be of use to you. Not foolproof, but it helps:

As business advisors, we often remind our clients to strive to be more efficient and to operate “lean”. It is particularly important in this fast changing economy that an individual’s and business concern’s major assets be continually managed. We, similar to you, want to maintain or possibly enhance our cash flow, reduce postage and stationary costs, as well as help minimize the clerical time it takes in the collection effort. With this in mind, we thought it an opportune time to review our firm’s billing policies and procedures for new as well as existing clients.

Unless special arrangements are made in advance, all invoices for professional services rendered are due upon presentation. To so assist, we may have someone from our office personally call after thirty (30) days to remind you of what hopefully may be an inadvertent oversight. A service charge at the rate of 1.5% per calendar month may accrue on any balance not paid within 30 days of the invoice date. We encourage you to charge any balances due us on your own credit card which we’ve accepted for some time now.

Needless to say, we value our relationship with you and look forward to a long and mutually beneficial association. As always, should you have any questions, please do not hesitate to call us at 856-489-5559.