“What can I do to help clients pay me in a more timely fashion when I do not have a full-time collector on the phone all day reminding them that payments are due.” -Owner in St. Louis

Dear Owner in St. Louis:

This is a common concern for many staffing companies that are in a growth pattern. There are a number of methods to quickly collect your invoices without having to make follow-up collection calls.

The first step is to inform your customers of your credit terms when establishing their credit account. Make certain to reiterate your terms a second time when and ask, “Will this be a problem for you?” They have now committed that they understand YOUR credit terms. If time permits, hand deliver the final bill and present it while thanking them for their business. At this time you can point out the payment address on the invoice. This is also good customer service resulting in strong customer relationships.

Another option is to prepare reminder notices for your customers that are due, but you have not received payment. This is a friendly reminder and will send the message to your customer that you have a control system in place for your receivable, but more importantly will result in a payment. Since you do not have a dedicated staff to monitor your receivables, the notices can be prepared in the evenings at your leisure.

“What is the difference between a secured creditor and un-secured creditors?” “How do you become a secured creditor?” -Owner in Fort Lauderdale

Dear Owner in Fort Lauderdale:

Secured creditors are first in line for payment when a company is having financial problems. This becomes a factor only when the customer is filing for bankruptcy protection, selling the company, dissolving the company and liquidating the assets to pay existing liabilities, or when a secured creditor has not been paid and is forcing the customer to pay their obligation. In cases such as these, secured creditors are paid first and unsecured creditors are paid from what assets remain after secured creditors are paid.

If you want to ensure that you are a secured creditor, you can do so by either having your customer sign a personal guaranty. This is a preferred method of securing your interest as it ties the individual to the debt personally. They are more likely to pay a debt that they are personally liable for before any other debts.

Another method of securing your debts is to file a U.C.C. (Uniform Commercial Code Financing Statement) with the Secretary of State. Our sister company C&R Credit Services, Inc. can help provide the necessary forms (www.cr-cs.net), or you can contact the Secretary of State and download the forms. While this process will secure your debt, there may be earlier filings that will take priority over your filing which can be determined during the filing process. They recommend to attempt to secure a personal guaranty whenever possible.

Jackie Compton has been in the credit and collection industry for seventeen years. Ms. Compton has become instrumental in the evolution of how credit and collections are handled in the staffing industry and what can be expected in the future. With expert knowledge in this industry, Ms. Compton is available to address any questions or concerns related to the staffing market place. Phone: 1-800-283-0909 ext 2011