Having a delinquent account, especially a large one that your business is counting on, can be a major problem.
Salt Lake City, UT (PRWEB) September 20, 2012
One of the most frustrating challenges business owners face in a down economy is debt collections. With many businesses not paid up front for their services, collecting payments from customers can be a daunting task. Because of the difficulties associated with do-it-yourself collections, many companies turn to organizations like Transfac Capital to take care of collections and accounts receivable management. Transfac Capital's new website has information for businesses that are struggling to collect overdue accounts.
“Having a delinquent account, especially a large one that your business is counting on, can be a major problem,” said John Thompson, chief financial officer for Transfac Capital, a firm specializing in accounts receivable funding. “The time and money it takes to do collections internally is often unplanned and can be especially hard on small businesses. Many businesses will wait too long after an invoice is past due to try and collect, which hurts the likelihood that they will be able to fully collect what is owed to them.”
Some businesses are set up to handle debt collection problems internally, while others outsource the task. Some of the most challenging issues a company might encounter when taking on the task internally include:
Dealing with Excuses
Customers will come up with all sorts of excuses for the delay in payment including cash flow problems, disputing something they were charged for, not receiving the invoice and more. Having an effective rebuttal prepared when trying to collect might help move the process along. For example, if a customer said they didn’t receive the invoice, offer to email or fax a copy, and then ask when payment can be expected.
When a business files for bankruptcy, it is up to the courts to decide if another company or creditor will be able to collect what is owed. A proof of claim and other paperwork often needs to be filed with the bankruptcy court. This process is lengthy and can take years before any money is received.
Both small and large businesses are struggling in this difficult economy, and many are having to close. Strong communication, especially when an account becomes delinquent, can help companies know if credit limits should be re-evaluated. Regular communication with the client could also be a helpful indicator for knowing if there is the risk of not being paid.
Because of the complexity of the challenges businesses face when dealing with collections, many turn to companies like Transfac to handle accounts receivable, including collection efforts. Beyond collections, Transfac’s accounts receivable services for businesses include credit assessment, invoice creation, sending invoices, lock box services and cash application.
About Transfac Capital
Going strong for more than six decades, Transfac has helped to pioneer accounts receivable funding, business credit risk assessment and accounts receivable management since 1942. Transfac grew from a Pacific Northwest transportation cooperative that took over the daunting function of financing, billing and collecting thousands of invoices each week. Today, the firm has clients across America from a variety of industries including manufacturing, distribution, wholesale, service, communications, transportation, recreation and staffing. Transfac Capital recently updated its website. The site now includes up-to-date information about the company’s products and services. For more information, please visit http://www.transfac.com.