Collecting monies owed to your business is important regardless of the business you are in. Without money flowing into your business, your business could not and would not be operational. Collections is a key issue for all business, whether you own an electrical store, phone company, doctor's office, car company. In this day and age, with many people hurting financially, it is difficult to stay current with all obligations, however, as a business owner if your policy is to be lax with your customers, you may find yourself in a position where your client's supposed inability to pay will lead to your inability to keep your doors open.
One way to prevent that from happening is to take your collections seriously. The first step in doing so is to adopt internal collection protocols and policies. Make sure you and your staff are in the midset to ensure you collect on all sales and services. Adopt written procedures to collection. Do you charge prior to rendering services or a product? Will you work on credit? What is your billing practice? Do you send a bill immediately at the time of service? Or will you wait a few days to invoice? What is your invoicing protocol?
The second step once you have adopted proper procedures is to ensure you are utilizing proper contracts/order forms with your customers with legal protections included should your customer/client/patient fail to pay for services/products rendered. Doing so will require working with an attorney to ensure proper legal protections in place. Additional language you will want included are protective provisions disclaiming liability in case of any type of loss by the customer/client/patient.
The third step in collecting is to actually collect. If you fail to collect from a customer/client/patient after following step 1 and step 2, you may wish to proceed to collections by utilizing a third party to assist in your collections process. Many businesses to partake in collections by utilizing a collection agency and/or a law firm to assist. A collection agency is not a law firm. And, a law firm will have the ability to take more immediate action. Choosing the right firm to work with is most of the battle. Be sure to contact a law firm that specializes in collections and has a defined process. Intake from your company should be routine and the process for implementing a law suit on your behalf, or sending of a demand letter if that is all you require should be a set process. Also established should be the fee structure. Law firms that regularly perform collections have established billing practices. For instance, our law firm take 1/3 of any amounts collected (contingency fee) for all collections. We don't collect, we don't get paid. Up front costs for clients are any and all fees to the court, service of process, etc. For demand letters, we charge a flat amount of $30 per letter. Do not be duped into sending your collections to company that does not have an established process.
Following the steps set forth above will allow you to have a higher collection ratio. If at any point you realize that your business is leaving money on the table by failing to collect, contact our firm to discuss your options. We may be able to assist you in implementing any or all of the above stages and assist in making a dramatic difference in your collections.
Contact Ken Kirschenbaum, Esq. at (516) 747-6700 x. 301, Jennifer Kirschenbaum, Esq. at (516) 747-6700 x. 302 or Gene Rosen, Esq. at (516) 747-6700 x. 303 to discuss your collections today.