Collection Agency Offering Tips on How Not to Use Their Services
In a perfect world the performance of proper due diligence when granting credit would eliminate the use of collection agencies. In the real world the following of proper precautions and procedures may allow companies that extend credit better odds at getting their money back if the services of a commercial collection agency are required.
Generally, just asking questions is a good place to start. But just asking questions is the first step. Knowing how to interpret the answers and act upon the knowledge gained are all part of the educational process that Lou Figueroa shares with the business community to help educate them about credit and collections (often at seminars held at their Elk Grove Village, Illinois offices).
Some of the questions any business person should obtain on their credit application or customer information forms:
1) Full legal name of company and DBA or franchise name, if applicable
2) Business structure: Corporation/Partnership/Proprietorship/LLC/LLP
Names, titles and addresses of principals/members
3) Federal employer tax identification number. If a proprietorship or limited partnership, the social security number of the proprietor or general partner
4) Ship to address, telephone number, fax number, name and e-mail address of main contact
5) Bill to address, telephone number, fax number If a PO Box, the physical address Accounts payable contact, e-mail address and phone
6) Individuals authorized to submit orders
7) Bank reference(s): Bank name, branch, address, telephone and fax numbers Account types (checking, savings), account numbers, dates opened
Name of bank representative
8) Trade References (at least three), names, addresses, optional account numbers telephone, and fax numbers plus e-mail address
9) Statement confirming the veracity of the information, specific authorization to check references and credit history, including, if applicable, personal credit.
10) Terms and conditions of sale, acknowledged and accepted by the customer’s signature. The terms and conditions of sale may be included in the body of the credit application, on the back (but referenced above the customer’s signature) or on the order. The key is to ensure knowledge and acceptance of the terms and conditions of sale (memorialized by the customer’s signature) before the order is placed or processed. Terms and conditions disclosed on an invoice, after the transaction, can be successfully challenged.
11) The customer’s signature, printed name, title and date of signing
12) Always have your company's attorney review any documents before use
A few other tips to avoid potential problems:
• Know the credit worthiness of your customer and maintain good communication with phone calls or a personal visit
• Timely delivery of goods or services, organized documents (i.e., delivery receipts or signed work orders) and timely billing and monthly statements
• Join an industry credit group and actively participate
"Following these steps will help many companies reduce the need for the services of a collection agency, but always check with your own attorney to make sure you are compliant with all the laws where you do business", stated CDI President, Lou Figueroa.
Established in 1985, Credit Decisions, International, Ltd. is a commercial collection agency certified by both the Commercial Law League of America and the International Association of Commercial Collectors (one of only 6 agencies in the country holding certifications from both organizations). Focused on offering the best in communication and the highest net return, the CDI team is dedicated to both professionalism and client service. From extremely sensitive early recovery programs to third party collection and customized portfolio projects, CDI tailors its efforts to each client's needs using the integrity of the staff, effectiveness of their effort and the individual attention accorded each client to serve them across the nation and around the world.
For More Information, Contact:
Mark V. Matz
95 Randall Street
Elk Grove Village, IL 60007
Mark V. Matz