Maine Small Claims Court: What Are the Alternatives?

Posted by Marilyn Miller on July 21, 2021  /   Posted in Uncategorized

Small Claims Courts were set up specifically to allow business owners the opportunity to bring grievances to court themselves, thereby saving on attorney fees.

Courts in Maine and in many states continue are slowly reopening after a long  Covid-19 closure.  As they reopen, there will be a tremendous backlog.

If you have been using Small Claims Court to sue customers who owe you money, you will likely have to wait months (or years!) to get a hearing. And remember, the Court simply awards a judgment that you have to collect yourself, which will mean even more delay.

The good news is that there are alternatives to Small Claims Court.

Settlement: If your customer admits to owing you but does not have the funds the entire balance, consider settling for a smaller amount. We recommend lump sum settlements whenever possible to avoid a drawn out string of payments.  A small discount can save time and infuse cash into your business.

Payment Plans: If cash flow is an issue for your customer, they will not be able to pay in a lump sum and a well structured and documented payment plan can be a good option. Require a deposit to begin the plan. Make sure the plan is in writing and signed by the customer.

Promissory Note: Perhaps your customer is going through a rough patch but is certain to have funds to pay you in the future. A promissory note is a written promise to pay you on a certain date. The note must be specific in terms of the amount of payment, method, date, finance charges and so forth.

Set up an in-house collection agency: You will be amazed how much money you will be able to bring in if you set up a system and use it consistently. Draft a series of collection letters of increasing urgency. Provide your staff with scripts for collection calls. Meet weekly to review progress.

Hire a collection agency. Find a collection agency that has experience working in your area and with businesses like yours.  Make sure the agency is compliant with state licensing requirements (if they exist) and check references. Provide a collection agency all information regarding the debt and the delinquent customer. Keep in touch with the agency during the process.

Not every debt or every customer is right for a Small Claims Action. Even after the Courts reopen, you may find these are better alternatives much of the time. The best way to get the Small Claims Court right is to realize that is only one tool in the debt collection toolbox. Have a strategy that includes a solid in-house collection effort, a relationship with a debt collection agency and a working knowledge of the  Small Claims Courts, and success is guaranteed.

Collection Agency: Don’t Blame Them If….

Posted by Marilyn Miller on May 24, 2021  /   Posted in Uncategorized

The right collection agency can benefit your business. It is important to hire an agency that shares your goals and reflects your style. A collection agency does a great deal more than phone calls and credit reporting.

There are things, however that a collection cannot do.

If you do not have a contract that allows for costs of collection, you cannot expect your collection agency to pass those costs along to the delinquent customer. You want a collection agency that follows the law, always and adding fees without a written contract is simply not in compliance with the law.

You can reduce your costs of collection by taking the time to make sure your customers to agree to pay collection costs in writing in advance of a transaction. If you do not want to take the time to put together a contract, even a simple one, you cannot fault your agency when they tell you they cannot add fees.

A collection agency cannot collect a debt that has been discharged in bankruptcy. or a debt that is so old that the statute of limitations has expired. If you wait years to hire an agency, not only will you pay a higher collection rate, but you also may miss the opportunity to collect it at all.

Trust me, I really hate telling a client I cannot collect a debt. If I cannot collect it, I cannot be paid for collecting it, so I am going to do everything I can to find a way. However, I am a realist and there are things – like the statute of limitations – that I just cannot change. The frustrating part is that most times, the inability to collect or to reduce the cost of collection is entirely preventible.

For creditors, a little planning goes a long way.

There are measures creditors can take that will empower their collection agency to do a better job for them:

  • Customer contract that allows (in writing) for collection costs or accrual of interest
  • Less delay in sending files to a collection agency. After 90 days, bring in the experts
  • Share any information with collection agency that might help them do a better job.
  • Stop billing customers once they have been sent for collection. Send any inquiries from customers back to the agency and let them do their job.
  • Communicate your collection goals to the agency. If you would like customers back once they have paid their debt, you may want a softer approach to collection. On the other hand, if someone bounces a check on you, or disrespects your business, your agency should know you have cut ties.

If your are unwilling to plan a bit, you cannot fault your collection agency. The fault will belong to you. If you DO take some simple steps to plan and assist your agency, you will be delighted with the results.

Collection Agency: More than Phone Calls

Posted by Marilyn Miller on May 05, 2021  /   Posted in Uncategorized

Most people believe that a collection agency simply makes phone calls and reports debts to a credit rating agency. Certainly telephonic contact is an important part of the process. Although I contend it is overrated, credit reporting can perhaps assist with recovery.

So what else does your collection agency do?

Collection agencies have specialized tools to locate your customers and their assets.  I spend a good part of my day looking for people and their assets. “Skip tracing” is the research process in the credit and collections industry. The term comes from private investigation firms who would look for information on people who had “skipped town”. To me,  skip tracing involves finding new information (address, phone, email, assets) of customers who have moved.

Why is skiptracing important?

How important is skip tracing to the collection process? Lexis Nexis, a leading provider of research tools for law, government and collections estimates that 35% of delinquent debtors move annually. Also, 50% of files placed for collection will need some sort of skip tracing.

Collection agency research might reveal a name change due to marriage or divorce, new  phone number, or a new job. They will research a file under consideration for possible legal action  to make certain there are assets (job, bank account) to justify legal action.

Does skiptracing cost more?

Your collection agency should provide skip tracing as part of their services. Although some agencies charge a higher contingency rate for collections involving skip tracing, you should not have to pay an additional fee for it.

What sources are used to skiptrace?

Services like Lexis Nexis and Transunion offer automated services collection agencies use. However, these databases use public information.  If a person must have something in their name – a utility bill, driver’s license – anything. If not, chances of finding them with this method is next to nothing. Still, it is a good first step.

Collection agencies may also can review credit reports not only to obtain contact and asset information, but to get an idea of the debtor’s ability to repay the debt.

Often a collection agency will review court and land records. Solid research drives the strategy. As an example, we once selected a file for litigation. The debtor had a good job and owned a home. However, she had multiple judgments liens against her, more than the value of her home.

Skip tracing becomes an art when you take it to the next level and review the debtor’s social media profile. You would be amazed at how much information can be obtained from Facebook, LinkedIn or a simple Google search.

I love working puzzles, and quality skiptracing is just that. If your collection agency is not doing this for you, you are missing a huge piece of the puzzle.

Collection Agencies: 5 Biggest Misconceptions

Posted by Marilyn Miller on April 29, 2021  /   Posted in Uncategorized

Collection agencies get a bad rap. Some of the criticism is deserved. The very idea of receiving a collection call is upsetting. Some collection agencies have been poor actors. If you are a business, you hate the idea of hiring a collection agency.

However, some of the criticism comes from common misconceptions. Let’s take a look at the most common misconceptions:

Number One: Collection agencies are allowed to run rampant and have no accountability.

While requirements vary by state, many states require consumer collection agencies to be licensed and bonded. They are audited annually and held to strict professional standards. On a federal level, the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission offer guidance and provide an avenue for consumer disputes.

Collection agencies are also subject to civil penalties if they violate the provisions of the Fair Debt Collection Practices Act, or FDCPA. The FDCPA, a federal law that limits the actions of third party consumer debt collectors.

Like any industry, there are good companies and bad ones. However, most collection agencies are realizing that they key to staying in business is treating debtors with respect. Working with people and putting together payment plans that benefit all parties is the way to go.

Number Two: Collection agencies exist to ruin the credit of people in debt.

While many collection agencies use credit reporting as means to secure payment of a debt, it is only one tool, they are required by law to do so carefully. Debts are usually not reporting until a concerted effort is made to reach the consumer for payment. The reporting of one single debt has limited impact, and only the reporting of multiple debts will actually “ruin” credit. Good collection agencies focus more on recovery for their clients, because that is how they get paid.

Number Three: Referring a non-paying customer to collections will hurt your business.

Will customers be upset when they are referred to a collection agency? Sure. Will they refuse to do business with you again? Perhaps. My question would be, “Do you want to do business with someone who will not pay you?” Some business owners and physicians believe they will get sued by customers referred to collections. I have never seen this happen and I have been doing this work for nearly 20 years. Of course, if you know of a situation that could give rise to a cause of action against you, you should think twice about referring that file.

These days, online reputation is everything. Some small business owners are concerned that customers in collections will slam them online. If someone who owes money wants to share with the world that they have not paid for services (again, I have never seen this happen), don’t you think their comment will be seen for what it is?

A dentist client once told me that he was worried that he would get a reputation as, “the dentist who sends his patients to collections”. He was owed $100,00 and was having trouble meeting his expenses. I replied that he had the reputation as the dentist who nobody ever pays. We wound up collecting thousands for him, and not one patient ever complained.

Number Four: Collection Agencies Cost Too Much

Most collection agencies work on a contingency basis, which means they take a percentage of what they recover. They do not get paid until they get you paid. If you are at the point of hiring a collection agency, you are aware that you have nothing.

Imagine a business that provides a cost for service to you before knowing what it will cost them to provide that service? That is exactly what a collection agency does. When they accept a file, they do not know if they will collect in a week or a year, but still quote you the rate to collect the debt.

If your collection agency fails to collect, you do not owe them anything. How is that expensive?

Number Five: Collection Agencies do not do Anything I Cannot Do Myself

Collection agencies only collect money. They focus on it. Do you have time to focus solely on chasing non-paying customers? Collections agencies have specialized tools to research and find people. They have the experience to determine the ability of people to pay, and the skills to negotiate a settlement on your behalf.

If you have an issue with customers not paying you, but are not sure a collection agency is right for you, pick up the phone and speak to a few agencies. Call some business owners you know and talk to them about their experiences. I think you will be pleasantly surprised.

Debt Collection Agency Fees: How They Work

Posted by Marilyn Miller on April 07, 2021  /   Posted in Uncategorized

Small business owners everywhere are looking to reduce costs and improve efficiency in their companies, and recover money owed to them.  Some business owners just write off their bad debt hoping receive favorable tax treatment, but this is a big mistake since most small businesses are on a cash accounting basis, and there is no tax benefit for bad debt write off.

The goal is recover as much money as you can at the lowest cost to you. But how do you do that?

Companies should definitely try to collect all they can themselves but waiting too long to pursue bad debt can also cause problems. After two or three collection letters, the file should be turned over to your collection agency. The cost of a collection agency can vary and it is important to understand the ways that debt collection agency fees are applied, what is included, and most importantly, what is not included and would cost extra.

Collection agencies get paid in one of two ways: flat fee or contingency.

 Flat fee charges can work for some businesses, but usually only cover a certain time period, or cover limited services. For example, you pay 29.00 per file in advance and the collection agency sends one letter and makes a few phone calls. Per file fees debt collection fees are based on the hope that some files will pay quickly.

There are two issues with the flat fee approach to debt collection costs.

First, is often only available to companies that send large numbers of files to collections monthly, such as a large medical group. Secondly, services that are part and parcel of the collection process are probably going to cost extra. Over half of accounts sent to collection need some type of research to find new phone numbers or addresses, and research will not be provided on a low fee file. So, while these rates are attractive at first glance, they may not be the best option for you, especially if you have already done some in-house collection. The flat fee approach is fine for “low hanging fruit”, but you can usually collect those on your own. What happens to the tougher files? They are either parked on a credit report, where they will languish, or you will be asked for an additional fee for further collection activity.

The most common way collection agencies are paid is by contingency.

A contingency collection debt collection agency fee means that the collection agency gets paid no money upfront, and is compensated with a percentage of sums collected. The debt collect fees normally vary based on its “age” (how long outstanding). Contingency rates vary from 25% (or less) on debts that are under 90 days old to 50% (or more) on debts that are over a year old. Contingency rates should include the full range of collection services you need: research, credit reporting, legal fees. One of the most effective ways to minimize your cost of collection agency is to use a solid customer contract that passes on some of the cost of collection. Many states allow some or all of the costs of collection to be passed on to the customer if (and only if) the customer agrees to it beforehand.

Debt Collection and Leverage

Posted by Marilyn Miller on March 30, 2021  /   Posted in Uncategorized

In the past month, we have recovered the following payments for our customers:

  • A patient paid her bill because she needed an appointment
  • A marina customer paid delinquent boat storage fees so that he could get his boat ready for summer
  • Contractor paid a two year old bill so that he could buy more product from his supplier. 

All of these people had the means to pay, and knew they owed the debt.  Each debt was over a year old and each debtor had previously made failed promises to pay. What made them pay them now? Leverage!

There are many factors that can be an incentive for customers to pay you. One of the most powerful tools you may have is leverage. Leverage is the ability to without future product or service until your bill is paid. Not all business owners have the opportunity to use leverage. If you do have leverage use it to help recover delinquent accounts receivables.

Do not believe that using leverage you have is a negative thing. You are not “holding it over their heads”. You are asking them to fulfill their end of the bargain. You would not have provided the product of service or product if you knew that you would not be paid for it. 

A classic example of using leverage to get paid comes from the movie Ghostbusters. A snooty hotel manager refuses to pay the exorbitant bill presented to him for the removal of ghosts from his hotel ballroom. 

Bill Murray’s character, Dr Peter Venkman, offers to return the ghosts, which, of course would be disastrous for the hotel. Leverage!

Sometimes people give away their leverage, making it more difficult to get paid. Yesterday I received a new business inquiry who had obtained a small claims judgment but had not gotten paid. As we spoke, I learned that the judgment was against his former wife, who lived in the house with him along with their children. He was not willing to change his living situation, and I told him I thought in his current situation he had very little opportunity for payment.

Similarly, too many small business owners continue to provide customers with large outstanding balances product of service. Although in some cases, particularly in the medical field, it is difficult, perhaps impossible to deny service, it is important to set limits. It is important to have a process to know when and how you can and will 

I have a new file on my desk today from a contractor who had the perfect opportunity to file a mechanics’ lien against a customer’s property. Mechanics liens must be filed on a timely basis. The time limit to file them varies from state to state but is often 60-90 days after the work is completed. They are a great tool, the property cannot be sold until the debt is paid. However, if a mechanics lien is not filed on time, the right to use it is lost forever. No leverage!

Another collection file I have is for an auto repair shop that let a customer take his car without paying anything. Now, six months later, the customer claims not to have money to pay his bill. I believe that he would have found the money had my customer required payment before they released the vehicle. No leverage!

Here are some more examples of customer debt collection using leverage successfully:

  1. Pediatrician requires payment on account in order for parent to receive camp or  school physical form.
  2. Orthodontist requiring full payment for braces to be removed.
  3. On first cold day, home heating oil company requiring full payment on old balance before new fuel is delivered.
  4. Manufacturer combining new orders at a discount if old balance paid.

In some cases you can cut a customer off entirely. In other cases, you may only be able to limit them. Whatever you do, make certain to always require at least some payment. Remember, every time a customer makes a payment, they add to the statute of limitations, the time period you have to legally collect the debt.

Accounts Receivable Management: Not a Spectator Sport

Posted by Marilyn Miller on March 25, 2021  /   Posted in Uncategorized

Accounts receivable management is essential to the financial health of a small business. All too often small business owners forego accounts receivable management, claiming that they are too busy with sales or day to day operations.

Everything is fine, they will say. We grew our sales by 50% this past year, and we have to focus on servicing our customers. If we keep them happy, they will pay us. 

Famous last words. All the sales in the world mean nothing if they are only sales on paper, that is, if you are not actually receiving money. I have seen too many business get into a cash bind because they were not paying attention to receivables.

Certainly happy customers are more likely to pay you than dissatisfied customers. However, I have built a business on collecting from people who have never disputed the product or service they received.

Design an accounts receivable program and stick to it.

Do you have an aging report? If not, you must get one immediately.  An aging report shows you which customers owe you money, and how long each customer account has gone unpaid.  It is likely that you already have the software to construct an aging report. If you do not, accounting software such as QuickBooks will do the trick.

Once you have your aging report in place, live with it. Review weekly and come up with a plan to contact delinquent customers. Bring in key staff and assign weekly tasks for follow up. I once had a client tell me that they were in such a cash bind that they were having trouble paying their bills. They began small group meetings every Friday that lasted only 30 minutes but reviewed delinquent customers, which steps had been taken, and what the next step should be.  Just paying to attention and calling customers or sending them a collection letter made a dramatic difference.

We recommend, as a rule, a 90-day process for accounts receivable management:

After delivery of product or service – Customer service call to ask if customer happy service. Use the opportunity to confirm billing information.

  • Thirty days – Friendly reminder letter or notice
  • Forty five days – friendly reminder phone call
  • Sixty days – Second letter. You can draft a completely different letter or simply send the first letter with a stamped, “Second Notice” on it. Be creative here. Use a different color paper, or a sticker in a bright color that lets them know they need to pay you.
  • Seventy- five days – Phone call from management.
  • Ninety days – Final notice to pay within ten days or be turned over for collection.

You may want to wait a little longer, say 120 days for some customers, especially if they represent repeat business to you. You may forego outside collection and take them to Small Claims Court yourself.

The specifics are not as important as having a process and having the discipline to stick with the plan. Consistency is key.

Even if you are lucky to have an accounts receivable department, do not sit back and assume everything is fine. Get involved. Lend support. Let the accounts receivable team know you are available to help when needed. Let them know they are a vital part of your company.

Accounts receivable management is not a spectator sport!

Medical Debt Collection: Did You Intend to Offer an Interest Free Loan?

Posted by Marilyn Miller on March 23, 2021  /   Posted in Uncategorized

Over the years, I have worked with a number of medical and dental practices, helping them collect delinquent patient accounts and working with them to improve their credit practices. I am certain that any business, especially a medical or dental practice, can reduce the bad debt in their business. Consider the following ideas.

Verify and communicate insurance

For both new and current patients, verify insurance coverage before each visit. Before the patient is seen, make sure they understand any limitations and out-of-pocket expenses they may encounter, and do it in writing.  Review with patient and make sure they sign a statement that they understand and agree to pay any sums insurance does not cover.  If the patient has a high deductible, consider a separate notice that explains it. Review the notice with the patient and ask them to sign their agreement.

One of the things we often her from people in collections is, “I thought my insurance covered that”. While we understand how health insurance works and can explain it to them, if you communicate insurance coverage in advance, you might save problems down the road.

Patient Responsibility Form and Your Expectations for Payment

Each new patient should sign a statement promising to pay any out of pocket costs. The statement should inform patients when you expect to be paid and the types of payment plans you are willing to accept.

Patient Billing

Once insurance has processed the claim, patient statements should be sent that clearly indicate charges, payments and adjustments. Bill promptly and regularly.

Make it easy for patients to pay you

I recently visited a new specialist. My insurance carries a $35.00 copay per visit. The day following my visit, I received an email with a link. I was able to pay easily and quickly.  If you do not have an online payment portal, invest in one. Merchant providers are providing all sorts of options, including delivery via email and text.

Many patients now have Health Savings Accounts. Make sure to let patients know you can accept them for payment.

Offer a variety of payment plans to patients, including CareCredit or another healthcare financing option, if available to your practice. Make certain all payment plans are in writing, and signed by the patient.

Collection on Overdue Patient Accounts – It’s a process

Stay on top of overdue patient accounts. Set up a process to follow up. Compose a collection letter to send after 30 days. Your letter should be polite but firm. Again, give a specific time period for payment. You can also send a second letter with increasing urgency, and advise patient that you will take further collection action if payment is not received by the due date.

Do not hesitate to hire a collection agency

If a patient goes more than 90 days past due, you are likely going to have trouble getting paid. Consider hiring a collection agency that is experienced in medical debt collection. There are many good agencies out there, and you should be able to find an agency that understands your business.

You provided service with the expectation of being paid. You also did not intend to give an interest free loan. The more you communicate your payment expectations, the more likely it is that patients will pay you on time.


Ten Tips to Maximize Recovery of Delinquent Customer Accounts

Posted by Marilyn Miller on February 10, 2021  /   Posted in Uncategorized

Do you want to send fewer customers to collections? Do you want to maximize chances of recovery of the accounts you do send to your collection agency? 

Here are some ways to do it.

1. Establish a clear and consistent credit policy and stick to it.

• How much credit are you willing to extend to customers? • How long are you willing to wait for your money? • What sort of terms will you offer? • What are your competitors doing? • What image do you want to portray in the community? • When are you willing to “fire” a non-paying customer? • How far are you willing to go to collect money owed to you?

2. Develop a system to monitor your receivables.

Review the aging of your receivables every 30 days. Many small businesses use Quickbooks, which provides excellent reports that you can use to track your non-paying customers. The best report in the world is not of any use though unless you are closely monitoring it and have a plan to take action at each step along the way.

3. Designate one person as primary contact responsible for accounts receivables and collection.

The key is focus. You need one person driving the process – someone always looking, and communicating any issues to key individuals within the organization.

4. Set up in-house pre-collection process and use it consistently.

• When are you going to send a follow up collection letter? • When do you make follow up phone calls, and who makes them? • Involve sales, customer service and management in the process • Personal contact get results

5. Use a contract with every customer. Your contract MUST have: • Scope of work to be performed • Length of project • Cost of work • Terms for payment • Consequences for non-payment (interest/collection costs)

6. Use a personal guarantee in your contract with a business.

You sign a personal guarantee when you borrow for your business. Expect the same guarantee from your customers, especially businesses under three years old. A personal guarantee will enable you to recover from someone even if they go out of business.

7. Collect complete customer contact information and update regularly.

Collect all customer data you can, include all phones, place of business etc. For a business, make certain you have the correct legal name. For an individual, make certain you have full name including professional title, middle initials, Jr/Sr. Update every time you have contact with the customer. Do not simply ask, “is everything the same?” Ask, “Is you phone number 203-555-xxxx?”

8. Invoice regularly and present invoices that are clear and detailed.

Many collection problems result from poor billing practices. Make sure your invoices clearly detail each charge as outlined in your contract. State due date for payment. Send bills monthly.

9. Offer incentives for prompt payment and set up payment plans that work

Offer a discount for a cash payment, or a payment made before the due date. Or, set reasonable payment arrangements, preferably with a significant down payment (e.g. 25% down/9 equals). Be sure to document all arrangements!

10. Make it easy for people to pay you

Obtain credit card from customers for automatic payments. The more you can get people paying you automatically the better. An e-commerce payment portal might work for your business – the cost of putting it together will pay off in cash flow to you.

Small Business Debt Collection Resolutions for 2021

Posted by Marilyn Miller on December 31, 2020  /   Posted in Uncategorized
All those in favor of ending 2020, raise your hand.















Certainly 2020 was a difficult year in many ways, but the good news is that if you are reading this, you are still standing. This past year has also presented opportunities to rethink our businesses, and find a new (and maybe better?) way to do things. 

President John F. Kennedy famously said, “The Chinese use two brush strokes to write the word ‘crisis‘. One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger–but recognize the opportunity”.

Many of us took advantage of the opportunity created by the COVID-19 pandemic to change the way we live and work. So which changes will you bring forward into 2021 and beyond?

Personally, I will continue reaching out to older family members, many of whom live alone. I will continue to improve my ability to work remotely wherever I am. 

As respects debt collection, we did not have the use of Small Claims Court for nearly the entire year. So, we got better at putting together settlements and payment plans. In the end, settling for a little less money may always be preferable than a drawn out legal battle.

Take a look at your credit practices – the who, what, when and how of extending credit to customers and patients. What care your resolutions to improve in the new year?

Small business credit practices are often an afterthought. I have lost track of the number of times I have heard a client say, “I know I should have….but I didn’t’, and now they have not paid me.”

You are already doing a number of things right. Look at what worked for you in 2020, and keep doing those things. At the same time, resolve to take some simple steps to strengthen your small business credit practices.

Gather and Update Customer Information

Every contact with a customer is an opportunity to collect and update information that may be helpful to you. These days, people move often. Make sure to update address, phone number and email every time you speak with a customer. Do you have current insurance information? A valid credit card? You will not know until you ask.

Remember the 3D’s: Deposits, Dunning and Documentation

Whenever you can, collect a deposit when you extend credit to a customer. Customer with “skin in the game” are more likely to respect the credit arrangement. At a minimum require a current credit card on file. Many people pay their household bills with automatic withdrawals. Payments to you should be no different. Dunning, or billing your customers on a regular basis, seems like a simple task, and is often poorly executed. Bills must be sent promptly and regularly. They must be legible and easy to understand. They must provide information on how to pay, and who to call with billing questions. This is an easy one! Proper documentation of all credit transactions, including documentation of the terms of any payment plans is a must. Memories fail us, and details not documented may be lost forever.

A customer contract is your best friend. Use a written contract for every credit customer.

Oral contracts are legal in most states, including Maine. However, once again, if you do not put terms in writing, you leave yourself open to interpretation. In a payment dispute, your customer may remember things differently than you do. Your contract must include how much to pay, when to pay,  and the consequences of non-payment. No time for a detailed contract? Send basic details in an email to your customer, and ask them to email back their confirmation. Voila, a simple contract. Remember, you can take the time beforehand to document your terms or you can argue with your customers afterward.

Stay on top of your accounts receivable, have a plan to follow up on accounts and stick with the plan.

A consistent process of review and action will make all the difference with your accounts receivable. It will boost your cash flow and reduce the number of files you will need to send for outside collections. Involve key staff. Make it fun, or at least take the dread out of the process by coaching your staff on how to talk to customers about a debt. Use a well-written debt collection letter to follow up. Managing your small business credit practices is not rocket science. It takes commitment and consistent effort. For 2021, resolve to keep doing all the great things that made you successful last year, plus a little more. United Obligations wishes you a happy, healthy and prosperous New Year!

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