Newsletter: Farrier Industry Report | November 2006

8 Strategies To Boost Collections And Improve Cash Flow | by Dennis Venezia

Today’s business environment is tough and you have to battle for every sale. However, until you have received your payment, the sale is not complete. Furthermore, if payment has not been made that “sale” has now become an expense, both in time and money. The question is:  how do you get your customers to pay you quicker and drastically reduce your bad debts without chasing your customers to your competition?

The following are eight proven tips to assist you in developing some time-tested collection strategies that your credit and collection department can implement—helping you recover hundreds of past due bills. Your company’s cash flow will improve while the cost and frustration of collecting the money that you are entitled to is significantly reduced. Some of the credit and collection tips will actually help you keep your customer base by improving customer goodwill, which can pay off in additional sales for years to come.

1. Use The Telephone As Your Main Collection Tool.
The telephone just gets better and faster results than written correspondence. It allows for two-way communication and it’s harder to tell someone no or ignore the situation if you are talking with them on the phone.

2. Hold Orders Before Your Customer Gets Too Far Out.
Many creditors are too afraid of losing customers to hold orders. However, holding orders may be necessary to get your payment. But do not surprise your customer with this. Give your customer a date and a dollar amount needed. Explain to your customer why you cannot continue to sell without receiving payment first. You will get better cooperation and your customer is less likely to take his business to your competition. If you let him go too far, he may not have the capacity to repay the debt.

3. Persistence Pays Off.
Many debts are paid slowly because no one routinely is asking for payment and following up on commitments. Determine ahead of time when and how frequently you will contact your customer when payment is not received. Avoid leaving many messages for your calls to be returned. Instead, ask when your contact is expected to be in and call back at that time.

4. Use The Post Office To Help You Collect Your Money.
Lose track of your customer?  Send all of your invoices and correspondence with the statement “Address Service Requested” under your return address at the top left corner. If the post office has a forwarding address, they will return the mail to you with the updated information.

Also sending a collection notice by certified mail is an inexpensive way of impressing upon your customer that you are indeed concerned about their account. Their situation is out of the ordinary course of business and they need to address the situation.  

5. Visit Your Debtor’s Place Of Business.
When your debtor is avoiding you, breaks his pay commitments, or makes a commitment to pay a seriously past due bill, go to his office to pick up the check. It’s hard to be avoided or be told that they are not going to be paid in person. You will rarely leave empty-handed.

6. Reduce Bad Checks By Using A Check Guarantee Service.
Checks received on over the counter sales and COD orders can be guaranteed by a third party for less than it cost you to accept a credit card for payment. If a check is returned for insufficient funds, you turn it in to the check guarantying company and they pay you the face value of the bad check. The check guarantying company becomes responsible to collect the bad check and it is their loss if they do not collect.

7. Use The Small Claims Court To Collect Your Money.
Rather than spending money for an attorney to file suit on a small balance, for a small fee you can sue the debtor yourself in Small Claims Court. Many debtors will settle with you prior to the court date. If they don’t, you may be awarded a judgment, which is an order from the court for the debtor to pay you the amount of the judgment. If they still do not pay you, the court may allow you to legally attach your customer’s nonexempt assets to enforce payment.

8. Don’t Wait Too Long Before Using A Collection Agency.
If you are not making progress and are feeling uncomfortable about your situation after your customer is 30-60 days past terms, you should consider using a third party for collections. Serious delinquencies are a symptom of a struggling business. A third party is usually effective because your customer knows that the situation is serious and wants to protect his credit standing.

Dennis Venezia (Dennis@beaconrecoverysystems.com) is president of Beacon Recovery Systems. These tips were excerpted from a booklet, “18 Proven Tips and Strategies to Boost Collections and Increase Your Cash Flow.”  For a free copy of the booklet, email Venezia or email info@beaconrecoverysystems.com.

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Business Conference Report
Hola, amigos!  For those of you who missed our annual FIA Business Conference, herradura means horseshoe in Spanish (and yes, it is also premium tequila!)  The conference was held at the beautiful all-inclusive Crown Paradise Club in Cancun, Mexico, this last October. With over sixty people in attendance, both manufacturers and distributors were well represented. The amenities were superb, featuring a crystal blue ocean, sparkling white sand, plenty of entertainment opportunities and excellent conference facilities. The Caribbean weather made it hard for many of us to show our tan faces to customers and co-workers without invoking some jealousy!

The speaker for this conference brought plenty of knowledge and experience for everyone’s benefit. Elly Vallas, a nationally recognized speaker and author of “Guerilla Marketing,” presented “Lessons from the Back Nine,” which focused on practices and strategies that are common among successful businesses. It was followed by roundtable discussions of specific topics and concerns within the farrier industry. In addition, several hours were spent on human resource issues pertaining to the hiring and training of quality employees. And because of the countless networking opportunities by the pool and on the beach, the learning and brain-storming continued on throughout the weekend! 

We are currently busy planning next year’s business conference. We have tentative plans for another cruise and are currently collecting hosting proposals from several cruise lines. Keep your eye on the FIA newsletters as we will be updating you as information becomes available. Please make plans to attend the FIA member breakfast at the annual AFA convention in Albuquerque.  At that time, next year’s plans should be finalized and I will be presenting final details and booking information.

Have a safe and healthy holiday season. I look forward to seeing you all in New Mexico!

Best Regards,
Amy McLane-Fitzgerald        

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Letter from the President
We’ve completed yet another successful conference in Cancun, Mexico, and the quantity was not quite up to the quality of attendance. Companies who were in their 1st or 2nd year of attending the conference expressed gratitude at the welcoming acceptance they received from existing FIA members.

Growth was not limited to formal meetings and throughout the meeting place, it was observed that many ideas and exchanges of information were ongoing. Overall it was apparent that improved visibility and strengthened communication existed while in Mexico. Informal discussions even led to the formation of a new FIA Committee (Marketing) headed by Bob Bachen; this committee will enable greater exposure to the horse owner, trainer, vet, farrier, etc. Bob is highly motivated and has the betterment of our industry at heart.

Albuquerque is looking better each day and we are anticipating higher attendance for the coming years. Facilities will be above and beyond by offering Albuquerque’s unique atmosphere as well as providing a historical city for those interested in touring the sites, shopping or just experiencing Southwestern Hospitality.

Thank you to the Board Members, Committee Members and each of you who have offered suggestions for the continued growth of the FIA. Also, thank you to Don McGinn, who has been very helpful ensuring deadlines are met.

As always, we welcome any new ideas you may have for future conferences, recommended speakers, conference locations or any other suggestions or concerns.

Wishing all of you a safe and pleasant Holiday Season and we look very much forward to seeing you in Albuquerque!

Respectfully,
Marguerite Therrien-Paig

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MarketPlace News
Once again, the FIA MarketPlace at the AFA Convention is shaping up to be another sellout event. This year's MarketPlace in Albuquerque promises to be another blockbuster for our members with good sales, a great town and lots to do during our off time. The desert, the mountains and artful Santa Fe are close by. There are only 37 booths remaining so if you have not booked your space, you'd better hurry before they're all gone.

In a never-ending attempt to make sure booth selection for our members is fast and fair for all, we will be instituting a new selection process for 2008 that will allow a smoother delivery of the packets to the membership. Starting in 2008 we will offer you the choice of receiving your packet by broadcast e-mail, broadcast fax or regular mail. Everybody who chooses email or fax will get the information at the same time. Those who chose regular mail will get them a few days later, of course.

Today's technology allows us to purchase fax machines for about $20, so there's really no reason why everybody can't receive their packets all at the same time.

We will go around to all booths in Albuquerque and sign you up for your preferred method as well as send out letters to all members asking for their method of choice. This will be communicated to the membership several times in newsletters and separate mailings to ensure everybody understands the concept. We hope this will eliminate the yearly trouble of lost or slow mail.

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