Collection Best Practices That Increase Cash Flow

Accounts receivable commercial collections at many companies are still in the green eyeshade era with out-of-date processes, leaving many opportunities to improve results. However, like many repetitive processes, collections is a production operation and can be engineered to improve cash flow, reduce DSO, and slash the disputes that result from letting unpaid accounts go stale.

This is a zero-sum game. If you do not aggressively work to collect your receivables, the customer will pay other vendors who were more assertive in their collection follow-up. Your customers learn from your practices. Unfortunately, many creditors wait until the customer is seriously past due before making the first collection contact.

At Leib Solutions, considered one of the best commercial collection agencies, we know cash flow is the lifeblood of every business, and success or failure depends mainly on how well accounts receivable is managed. Collecting receivables more quickly enables companies to reduce bank borrowing, invest more in growth, and improve profits. Our experience is that delinquent A/R can be dramatically reduced, even cut in half. Here are some basic ideas to implement in your organization:

Credit and Collection Policy. Every company needs a credit and collection policy that gives the department the appropriate framework to work. This policy (and procedures) should be by management – detailing the criteria, parameters and tools used (restricting credit, collection agencies, lawyers, etc.). Even a one-page credit and collection policy may be enough for a small company. Larger companies need to go into much more detail.
Advise the Customer of Your Policies. The customer should receive a written explanation of your credit and collection policies- how you expect them to behave. Ideally, make it part of your Credit Application, but always email it afterward, so they understand the business rules.
Credit Application. Use a credit application which includes your policies and purchase terms, and use e-signatures to have an official, signed record. The buyer invariably has their terms on the back of their purchase order, which will not be favorable to the seller, so it is common sense to establish your business rules upfront and get it signed.
Contact Data. Your customer contact data should always include the telephone and email addresses of your payables contact, controller, and customer management. You should also have the owner’s cell phone number if the customer is small. All of this information should be on your customer credit application.
E-signatures. If you need documents signed, such as settlements and promises to pay, use e-signatures and forget faxes. Digital signing is effortless and is legally binding. It simplifies getting any agreements signed.
Correct Your Customers’ Habits. Large customers use software to optimize their accounts payable: they track how soon and persistently you follow up and pay you accordingly. Small companies follow the same practice without the software, often waiting until you call. They pay you based on how you train them to pay you through your everyday collection practices.
Set Up Standard Procedures and Train Staff. Do not leave it up to collectors to make up their own policies and rules about how soon or frequently the customer should be contacted. Most people do not like to ask for money; without rules, they may not call with the consistency required for effective collection results.
Letter Templates and Call Scripts. How much do you want your staff to exercise their inner artist? Do not leave it up to staffers to make it up as they go along or to develop personal collection strategies. Establish the rules, and provide standard collection letter or email templates and scripts for telephone and voice mail. Email vs. letters? There is no contest, as email is immediate and less work, but just as with form letters, you need to use pre-formatted collection emails.
Prioritize Your Work. Even with experienced collection staff, you need to prioritize collection activity so your staff works the receivables that offer the most significant cash flow payback. If you have an advanced system, you can also employ risk or payment scoring to assign the accounts needing first attention. You may also consider outsourcing all or part of the function to a qualified agency, which usually produces more focused, better results and usually at less expense than full-time staff.
Assign Goals and Track Results by Department and Collector. Collections is “production” work, and you need to develop clear goals for monthly cash and delinquency targets and the number of daily calls and contacts (since you need to have all customers touched).
Reporting. Daily reporting should include calls made, promises obtained, disputes resolved, etc. Monthly reporting should roll up the daily results, plus report the financial results – Cash Collected, DSO, Delinquencies, etc. Of course, the department goals must match up against the corporate objectives of your CFO.
Make Paying Easy. Offer multiple ways to pay, including ACH and credit card, with your smaller customers. Intuit QuickBooks, among many, has a very effective and free ACH offering for e-billing and a payment module that integrates with QuickBooks.
Systems and Workflow. If you have sizable receivables outstanding or many customers, or if you still use spreadsheets, you must acquire an A/R workflow system to manage collections and automate routine tasks. See Carixa for an idea of what a comprehensive, integrated “Software as a Service (SaaS)” system can do for you. Deploying this powerful collection software guarantees faster collections, lower DSO, and fewer delinquencies. As with all SaaS offerings, it is internet browser-based, so there is no software to install or hardware to purchase.
FDCPA Regulations. The Fair Debt Collections Practices Act doesn’t apply to B2B transactions, but always keep in mind that you must comply with the FDCPA if you are dealing with consumers. Regardless, all customers should always be handled professionally and consistently, which reflects your corporate culture, even the few abusive customers.
Collection Activity Cycle. Don’t wait as long as your competitors to make the first collection contact; use email to your advantage. Get the money first. Here’s an infographic with eight tips on what you should do to maximize your returns in the collection activity cycle:

Outside Help: Collection Agencies and Outsource Services

Professional receivables organizations such as Leib Solutions or Smyyth.com offers both First-party and Third-party collection services. First-party is another name for customer service-oriented outsourcing of non-seriously delinquent receivables under the client’s name. Generally, first-party services are performed for a low account service fee or a low percentage fee.

Third-party collections are the traditional “collection agency” services when accounts are old and uncooperative, with fees commensurate with the age of the receivable.

Some creditors wait until there is little hope of collection, telephones disconnected, or bankruptcy before calling a qualified collection agency. This delay is evidence of failed collection management. Often the company is concerned about collection fees, but the old saw “better to get 70% of something than 100% of nothing” applies here. It’s just common sense.

The first step in improving your company’s cash flow is to take the first step. Lay out a plan of attack, or, if you want some advice, contact us. We will be happy to help in any way we can.

January 1, 2023 Collection Management, Credit Management, News Post a Comment

Leib Receives Coveted A.M. Best “Expert” Award for the 15th Year

We are proud to announce that A.M. Best has, for the 15th straight year, selected Leib Solutions as one of a handful of companies in the world receiving the coveted “Expert Service Provider” designation awarded for business debt collection and accounts receivable services.

Leib Solutions has been in the commercial collection industry for over 35 years and is an expert at business debt collection in the insurance, manufacturing, distribution, services, and technology industries. Leib is affiliated with the Smyyth group of companies, which specializes in advanced SaaS software and outsourcing services for accounts receivable, credit, collection, and A/R deduction management. The organizations have decades of expertise and leading-edge automation to help clients optimize cash flow and reduce losses due to A//R revenue leakage.

December 30, 2022 Credit Management, News Post a Comment

Digital Signatures in Credit and Collections – A Best Practice

A digital signature is a cryptographic technique to provide authenticity, integrity, and non-repudiation of electronic documents or data. It is essentially an electronic version of a handwritten signature that provides assurance that the document or message has not been altered and was indeed signed by the claimed sender.

A digital signature is created using a combination of public and private keys. The sender uses their private key to sign the message, and the receiver uses the sender’s public key to verify the signature. This process ensures that only the intended recipient can read the message and that the sender cannot deny signing it.

Digital signatures are commonly used in industries such as banking, healthcare, legal, and government sectors to authenticate electronic transactions, contracts, and other important documents.

Business Case for Digital Signatures in Credit and Collections

Use digital signatures to streamline and speed up credit and collection agreements. Some are still uncertain whether electronic signatures are binding in the United States and Globally, but the use of e-signatures has become routine and is valid for most transactions. The following information is provided from U.S Government websites and our Smyyth companies’ corporate e-signature policies.

E-signatures have eliminated the hassle of completing commercial transactions, including use in Credit Applications and credit and collection agreements, to an extent that going back to faxes and emailed documents would be unthinkable for routine transactions. If your company is considering new credit risk software, collection software, or AR management software, consider including e-signatures in your processes. You should include all the standard company forms as templates within the digital signature system you decide on. Collection agencies also routinely use digital signing to confirm debt payment plans, as well as for creditor agreements.

The legality of Digital Signatures

Electronic Signatures in Global and National Commerce Act (E-Sign Act) and The Electronic Signatures in Global and National Commerce Act (E-Sign Act signed into law on June 30, 2000, provide a general rule of validity for electronic records and signatures for transactions in or affecting interstate or foreign commerce. There are four basic parts required for an electronic signature to be recognized.

The parties must intend to sign, just as with any written contract.
The parties must agree to do business electronically. For businesses, this can be shown by the circumstances of the interaction. Consumers, however, must affirmatively consent to use electronic records and receive related consent disclosures.
The e-signature system must capture and keep the record that reflects the process by which the “signature” was created or generate a graphical or textual statement proving it was executed.
The United States Laws require that the e-signature records be capable of retention and reproduction by the parties.

The E-SIGN Act solidified the use of electronic records and electronic signatures in commerce by confirming that electronic records and signatures carry the same weight and have the same legal effect as traditional paper documents and wet ink signatures. Both laws provide the following:

No contract, signature, or record shall be denied legal effect solely because it is electronic.
A contract relating to a transaction cannot be denied legal effect solely because an electronic signature or record was used in its formation.

Note: We do not provide legal advice, and we always recommend you consult with your counsel if you have any concerns. Also, many countries have specified certain types of documents or that are not appropriate for e-signatures, including wills and trusts, powers of attorney, and declarations under oath.

November 28, 2022 Collection Management, Credit Management Post a Comment

Credit and Collection Scoring Best Practices

There are numerous reasons to use automated credit scoring in your credit (and collection) operations, including faster and better quality decisions, enhanced customer service, more effective compliance and controls, and significantly reduced overhead. Employing credit scoring in a B2B environment is credit management “Best Practice,” especially if you have many customers.

Using Smyyth’s Carixa cloud technology for credit-to-cash management, Leib can seamlessly incorporate Credit2B’s advanced scoring results into Carixa’s enterprise credit management workflow. Leib and Credit2b.com are Smyyth affiliates.

Here are some benefits to consider from credit scoring, which includes leveraging your own historical data, credit bureau business information, and industry trade payments.

7 Good Reasons to Use Credit and Collection Scoring

Speed of Credit Decisions. Scoring can dramatically shorten the time it takes to approve orders, a major customer service and sales benefit.
Prioritized Collections. Use blended credit risk scores to set collection priorities, ensuring the accounts with the highest risk for non-payment get collection attention first. If you focus on “risk,” not just age and value, you will have better outcomes and less bad debt.
Personnel and Overhead Savings. Scoring automates the decision process, dramatically cutting down the personnel costs associated with credit approvals and letting you do more with less.
Credit and Collection Policy. You can use credit and payment scores to establish corporate policies for risk and slow payment tolerance. Credit and Payment scoring ensures consistency for applying credit policy.
Collection Agency placement based on the account age rules eliminates “decision freeze” when deciding when an account is turned over to a bad debt collection agency, reducing write-offs.
Customer Advisory. The credit manager can become a partner to sales if you counsel customers on how they can improve their scores by highlighting areas of weakness.
Fewer Bad Debts. You can expect reduced bad debts using a valid scoring methodology since many smaller customers would not get the same level of manual review as the larger exposures.

Data Elements Used in Automated Scoring

Financial metrics for large corporations can be predictive in the 2-5-year range, and many credit analysts still use a traditional or modified Altman-Z Score for this purpose. However, financials are often not available for smaller customers or they are often stale, unreliable, and subject to fast swings. For these smaller debtors, other data elements become more critical, including:

Years in business
Experience of principals
Number of employees
Revenue and Assets
Business and Industry Trends
Financial information (if available) using a dozen key metrics
Public records information
Supplier payment experience (including your trade credit groups)
Bank and Lender Experience
Credit Line Utilization
Credit exposures of other industry suppliers
Public filings, liens, etc.
Transparency with key suppliers
Derogatory comments; Reputation

Using Big Data and Machine Learning

Building truly predictive credit scoring is now significantly easier with the ability to capture “Big Data” from multiple sources and analyze it with powerful software and hardware, where the “machine” can learn from experience and adjust its conclusions; that is, make and correct its decisions based on experience, patterns and trends it sees in the data.

This is called “Machine Learning,” where computers are taught to detect patterns in data to both predict and validate outcomes with regression testing of past events and then adjust those based on current events. Reaching this goal has gotten much easier due to the rapidly increasing power of computer processing.

W.E. Deming famously said said, “Without data, you’re just another person with an opinion.”

We would add, “if you can’t process the data to produce real insights, they’re just numbers.”

Our experience is that leveraging machine learning can significantly improve predictive credit and payment scoring. We use these techniques to build and customize automated credit scores and credit lines for large trade creditors that need to improve and accelerate credit decisions. As we are a cloud-based service, there is no software to buy, and we integrate easily with client processes and systems.

Designing a Scoring Model

Our Credit Scoring Framework has a Simple Flow:

Working with a technology provider like Carixa, decide on the outcomes you would like to predict (e.g., bankruptcy, default, severe delinquency, or X days late), and establish a model.
Create a training sandbox using data attributes from multiple sources, including your own experience; for example, business standing, financials, and debtor payment histories, often as many as a dozen separate data elements, and even unstructured credit data, such as industry “attitudes.” Sharing this in our cloud platform speeds up adjustments, saves time, and simplifies managing the data.
Adjust for the outcome you are aiming for or test multiple outcomes based on “model training sets” created in your sandbox and adjust the importance or weight of certain elements.
More elements do not always better produce a better outcome; what is important is to pick and test for the right elements. For very small businesses, factors such as years in business, number of employees, and social reputation are critical. Economic factors are important. If the consumer economy turns down, it is a leading indicator of problems with payments and defaults in subsequent quarters.
Machine regression picks and weight-adjusts the credit attributes that are critical for the outcome you are trying to predict in real-time.
Using real-time industry data ensures continuous updates to scoring attributes and weights.

Advantages: The scoring model should self-adjust continuously without manual updates, pulling in more data types than traditional models, including micro and macroeconomic variables, to target the prediction of outcomes that match your company’s needs. The models adjust for specific industry or business needs based on your unique data or information, defining your preferred outcome with great precision. To complete a fully automated process, we provide calculated credit lines that can be integrated with any financial or ERP you use.
Customized Calculated Credit Lines

By applying your corporate policies, we can calculate a Dollar Credit Line for you, adjusted to your circumstances. This takes into consideration a number of factors, including your tolerance for risk (are you in a fast growth or more risk-averse environment), lender or insurance limits, or product profit margins (a consumer good with a 60% gross margin will tolerate more risk than a service with a 17% margin).
Our modelers interpret your process and policy, replicating your rules in a computer model. By way of example, where no financials are available and the customer has fewer than ten employees, you may decide “do not calculate a credit line” but instead perform a manual review or adjust a CCL based on the presence or absence or magnitude of certain elements.
Through feedback through a regressive “fit test,” we can adjust the algorithms as required to bring your scores in line with your desired outcomes.

Advantages: Custom Calculated Credit Lines are built to your circumstances and adjusted as required by your rules, policies, and internal and external events. Machine-generated credit lines are useful for accelerated decisions and risk analysis across an entire portfolio. We can actually do this across 99% of registered businesses in North America.

Summary: By using computational power and a scientific approach to data analysis, you can produce extraordinary results with automated credit decision processing and, in doing so, improve credit decisions and customer service while streamlining credit operations.

November 24, 2022 Accounts Receivable, Collection Agency Tips, Collection Management, Credit Management Post a Comment

Commercial Vs Consumer Collection Agencies

If you are in business, there will come a time when you need to enlist the services of a collection agency to help recover your past-due receivables and bad debts. So how do you find the right one?

Commercial debt usually involves significant amounts and often complex circumstances that can lead to financial issues for your business. If the money owed is business debt, Leib Solutions is a highly-rated expert who handles business-to-business bad debt collection.

What is Commercial Bad Debt?

Commercial or business, bad debt is the result of a company (the debtor) that buys services or products on credit terms but fails to pay what is due to the seller (the creditor). As a result, the creditor must then act by suing the debtor or assigning the account to a collection agency to avoid a loss. In the worst scenario, if the creditor does not take quick action, the creditor has to write off the sale as a bad debt. Usually, the two businesses have a binding written agreement, such as a contract or a purchase order.

Corporate Form and Owner Liability

Typically, business debts are the responsibility of the debtor corporate entity and not the liability of the entity’s owners. The corporate (corp. or inc.) and limited liability company (LLC) forms of organization are intended to protect the owners from the business’s debts. Limited partnerships (LPs) also offer protection, although the “general partner” of the LP may be liable for the LPs liabilities. In Partnerships and Sole Proprietorships, the partners or owners are generally personally responsible, so many business people shy away from these forms of organization.

Collateral and Personal Guaranty

When a corporation’s or LLC’s credit is insufficient, a creditor may request a personal guaranty or cross-corporate guarantees from affiliated companies, in which case those parties are also liable. In cases of long-term credit, the creditor will request collateral, such as property or equipment. Having collateral or a personal guaranty is a powerful inducement to pay.

What is Consumer Debt?

Consumer Debt is money owed by a natural person or persons. Consumer debt collectors usually deal with only one person – the debtor – and the debts are usually quite simple, unlike business debts, which can be much more complex. The collection of consumer debt is a very highly regulated activity. See FDCPA Below.

The Fair Debt Collection Practices Act [FDCPA]

The Fair Debt Collection Practices Act protects consumers from unscrupulous collectors looking to use any means possible to collect the debt and penalize those beyond established ethical guidelines. In addition to the FDCPA, many states have enacted versions mirroring the FDCPA, and others go far beyond with even more protection for consumers.

The FDCPA does not regulate Commercial collection agencies. The debt is still commercial if the agreement with your business customer also includes a personal guarantee. A commercial collection agency would be the appropriate entity to place this account for collection since they have special expertise in dealing with businesses and handling these complex matters.

Collection Agency Credentials

While most State and Municipal laws require licensing of consumer collection agencies for each state in which they operate, many State licenses for commercial collection agencies are reciprocal throughout the United States.

Professional commercial collection agencies also follow the ethical guidelines of trade organizations, including the International Association of Commercial Collectors, Inc. (IACC). Membership in the IACC requires compliance with high standards of practice.

Choosing the Best Commercial Debt Collection Agency

When choosing a commercial debt collection agency, you will be concerned about how long they have been in business, their capacity to act quickly and expertly to collect your money, as well as how professionally they deal with debtors since the agency is a reflection of your company.

You also want to ensure your receivables are given the most professional attention. Using an agency that only handles commercial accounts, and understands the types of disputes that occur in business transactions, will ensure the best results. Commercial collection specialization delivers better results for you.

Unlike consumer collections, the best commercial collection agencies are not “dialing for dollar” call center operations. Instead, they employ business and negotiation experts familiar with your business.

Comments on Collection Agency Fees

Never choose a collection agency because of the lowest collection rates, just as you wouldn’t choose a doctor on that criteria. It’s the expected net results -the amount of money you get back – that are important. A professional agency should always do its best, but keep in mind that the fee percentage they keep is their incentive.

September 17, 2022 News Post a Comment

The Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act (FDCPA) is a federal law in the United States that regulates the behavior of third-party debt collectors who collect debts on behalf of others. The FDCPA establishes rules and guidelines that debt collectors must follow when communicating with consumers. The FDCPA does not cover business-to-business debts or collection of certain torts, even from consumers. It’s worth noting that there may be other federal or state laws that govern the collection of debts arising from torts, even if the FDCPA does not apply.

Here are some key rules outlined in the FDCPA:

Prohibited communication practices: Debt collectors cannot contact a consumer before 8:00 a.m. or after 9:00 p.m. local time or at any time they know is inconvenient. They also cannot communicate with a consumer at their place of employment if the employer prohibits such communications. Debt collectors cannot harass, oppress, or abuse a consumer or use false, deceptive, or misleading practices to collect a debt.
Verification of debts: Within five days of the initial communication, a debt collector must send a written notice to the consumer that includes the amount of the debt, the name of the creditor, and a statement informing the consumer of their right to dispute the debt. If a consumer disputes the debt, the debt collector must cease collection activities until they have verified the debt.
Cease and desist: If a consumer notifies a debt collector in writing that they want the collector to cease communication, the collector must stop contacting the consumer except to confirm that further contact will cease or to notify the consumer that the debt collector or creditor may take a specific action.
Prohibition on third-party disclosures: Debt collectors cannot disclose information about a consumer’s debt to third parties except in limited circumstances, such as to a consumer’s attorney, a credit reporting agency, or to the original creditor.
Remedies for violations: Consumers can sue a debt collector for violating the FDCPA and may be entitled to actual damages, statutory damages up to $1,000, and attorney’s fees.

These are just some of the key rules outlined in the FDCPA. The entire law text can be found on the Federal Trade Commission website. Both consumers and debt collectors need to understand and follow the guidelines outlined in the FDCPA to ensure fair and ethical debt collection practices. Responsible commercial collection agencies such as Leib work within the spirit of the FDCPA, even if not required.

February 5, 2021 News Post a Comment

HIPAA Compliance

New Release

February 4, 2021

Leib Solutions LLC Achieves HIPAA Compliance

SUMMARY: Leib Solutions has demonstrated its effort toward HIPAA compliance by completing Compliancy Group’s proprietary HIPAA compliance process.

LEIB is pleased to announce that it has taken all necessary steps to prove its effort to achieve compliance with the Health Insurance Portability and Accountability Act (HIPAA). Through the use of Compliancy Group’s proprietary HIPAA solution, The Guard™, LEIB can track its compliance program and has earned the Seal of Compliance™, which is issued to organizations that have implemented an effective HIPAA compliance program through the use of The Guard™.

HIPAA is made up of a set of regulatory standards governing the security, privacy, and integrity of sensitive healthcare data called protected health information (PHI), which is any individually identifiable healthcare-related information. If vendors who service healthcare clients come into contact with PHI in any way, those vendors must be HIPAA compliant.

LEIB has completed Compliancy Group’s Implementation Program, adhering to the necessary regulatory standards outlined in the HIPAA Privacy Rule, Security Rule, Breach Notification Rule, Omnibus Rule, and HITECH. Compliancy Group has verified LEIB’s good-faith effort to achieve HIPAA compliance through The Guard.

Carl Torban, LEIB’s President stated that “Even though we only do business in B2B sectors and this extra protection is not mandatory, completing this compliance process demonstrates our continuing commitment to provide a secure environment for customer information. Our Leib Collect and Carixa™ cloud automated accounts receivable management system is a secure, encrypted platform for our customer data.

About LEIB

LEIB Solutions LLC, a Smyyth affiliate, is one of North America’s leading Commercial Collection agencies with more than 35 years of experience in Accounts Receivable Management. Its agency specialists are experts in their industry segments and, as a result, achieve faster and more successful outcomes. LEIB is committed to high standards, and technology that enables us to maximize recovery and increase revenues while protecting data integrity.

About Compliancy Group:

HIPAA should be simple. That’s why Compliancy Group is the only HIPAA software with expert Compliance CoachesTM holding your hand to simplify compliance. Built by auditors, Compliancy Group gives you confidence in your compliance plan to reduce risk, increase patient loyalty, and profitability of your organization.

June 9, 2020 Accounts Receivable, Collection Management, Credit Management Post a Comment

Accounts Receivable Automation Tools, AI and RPA

Advanced technologies, including robotic process automation (RPA), will forever change accounts receivable, collections, and deduction management.

Like most other back-office functions, receivables management was a manual affair as recently as twenty or thirty years ago, working off printed agings, typing reconciliations and letters and mailing or faxing. It’s hard to believe that tools MS Excel, word processing, etc. as well as the internet and email (then called “electronic mail”) were not generally available until the1990s, even in the most rudimentary forms.

Improvement of the receivables management function will not only bring down administrative (personnel) costs but importantly to manage cash flow and protect the company’s profits. It has not received a lot of attention up to now because there is generally not a lot of staff involved. For many companies, accounts receivable represent “low hanging fruit” for improvement at this point.

Today, with robotics process automation and artificial intelligence, the job of managing credit, receivables, collections, and deduction management can be incorporated into a holistic, integrated setup that manages the process from customer onboarding to payment. System workflow manages the accounts receivable operation from beginning to pay.

AR is a transformative opportunity for a relatively small investment to drive performance in one of the largest asset classes. Managing inventory turns gets a lot of attention and management time, and it should. Receivables deserve no less attention.

Consider that a $1 Billion(revenues) company may have $125 million of receivables, of which $10 million may be over 90 days and at risk, and there may also be many millions of disputes and customer deductions on top of that.

AR automation also improves the customer experience, eliminating or streamlining trading partner paperwork and reconciliation or orders-shipments-payments. Large buyers (say Wal-Mart, for example) are mandating automation, as increasingly necessary in competitive pricing environments.

For the manufacturer, a tightly integrated billing to payment process will assure a healthy cash flow and an increase in profits due to the elimination of the “revenue leakage” that results from collecting less than you billed.

We are affiliated with the Smyyth companies. The Smyyth Carixa™ Cloud Platform is an example of the type of advanced solution that can transform accounts receivable operations. Automated credit applications, system controlled collection reminder emails with customer-friendly credit card and echeck payment options built right in, computerized communications, instant deduction reconciliation, to 100% automated cash application. Using robotic process automation, even accessing customer systems, is automatic, for documentation, reconciliation, cash forecasting, etc. The software replicates (and automates) our decades of experience and best industry practices to deliver an outstanding, friction-free customer experience.

The technology to optimize credit to cash billing to payment processes is here and will continue to improve using AI and RPA. More companies need to recognize how much more successful they could be by automating these backroom operations.

“Companies can add a few points to their profits with a laser focus on managing what is often their most significant asset -accounts receivable “

December 18, 2019 Collection Agency Tips, Collection Management, Credit Management, News Post a Comment

Statute of Limitations

Statute of Limitations by State For Commercial Collections

The Statute of Limitations for lawsuits varies by state, and runs anywhere from 3 to 15 years, after which the debt is “time-barred,” and you cannot sue.

You should use every legal means at your disposal, of course, but if you wait too long and rely on a last-minute lawsuit as a hail-mary effort to collect what is due, you may be very disappointed. Time is not on your side.

Inevitably, the action will be stretched out, and litigation will be very expensive. The older the debt, the more convinced a debtor is that they will never have to pay, at least the full amount, and the more the claim will be subject to made-up disputes, and you will have great difficulty finding witnesses to testify.

And, of course, the present value of a possible recovery years later if you prevail in court and the debtor is still in business when you get a judgment is much less than the amount owed.

Never let your receivables age to the point you are concerned about the Statute of Limitations.
We recommend you use your commercial collection agency to negotiate the best deal they can, and then move on to new business.

Below is a rough guide only, and not legal advice. You will need to know when the statute of limitations begins to run, and the events that may occur that will delay it. The list below is indicative only but should be of some guidance to you; it does not cover government, injuries or property damage. Always check the current state statutes to be sure, and here is a link to a site with more detail if you need to do some research.

	Contracts			Contracts
State	Written	Oral	State	Written	Oral
Alabama	6	6	Montana	8	5
Alaska	3	3	Nebraska	5	4
Arizona	6	3	Nevada	6	4
Arkansas	5	3	New Hampshire	3	3
California	4	2	New Jersey	6	6
Colorado	varies	varies	New Mexico	6	4
Connecticut	6	3	New York	6	6
Delaware	3	3	North Carolina	3	3
DC	3	3	North Dakota	6	6
Florida	5	4	Ohio	8	6
Georgia	6	4	Oklahoma	5	3
Hawaii	6	6	Oregon	6	6
Idaho	5	4	Pennsylvania	4	4
Illinois	10	5	Rhode Island	10	10
Indiana	10	6	South Carolina	3	3
Iowa	10	5	South Dakota	6	6
Kansas	5	3	Tennessee	6	6
Kentucky	10	5	Texas	4	4
Louisiana	10	10	Utah	6	4
Maine	6	6	Vermont	6	6
Maryland	3	3	Virginia	5	3
Massachusetts	6	6	Washington	6	3
Michigan	6	6	West Virginia	10	5
Minnesota	6	6	Wisconsin	6	6
Mississippi	6	3	Wyoming	10	8
Missouri	10	5

If you have aged accounts, call us for advice, or start to start debt collection on your behalf.

March 5, 2019 News Post a Comment

4 Key Components of Revenue Cycle Management

The Revenue Cycle Function requires excellence in four key areas, each contributing to a company’s success and operational efficiency. Recognizing these focus areas will allow your company to generate a frictionless revenue cycle flow and improve your cash flow, customer service, and overall profitability. When providing B2B collection services for your business, Leib Solutions makes sure to take each of these factors into account to deliver you the best possible ROI.

Credit Management

Credit management is the first facet of revenue cycle management, and it includes the development of credit policy, onboarding new customers, and managing the trade credit risk exposure of the company. Tools used include analyzing credit reports, financial statements, employing automated credit scoring, credit application processing, checking customer references, collaboration with internal departments (e.g., sales), as well as automated workflow to control customer monitoring and credit operations.

Dispute and Deduction Management

Handling customer deductions may be the most complex job in the accounts receivable department since these “exceptions” are the result of process, product, promotion, price or shipping errors. Accordingly, a system is required to prioritize, route and track these issues throughout the company for resolution, and to highlight root causes since systemic deduction issues will not be cured otherwise. After investigation, a significant percentage of customer deductions will be found to be erroneous, and must be collected to avoid losing profits.

Cash Application and Accounts Receivable Management

Cash application and accounts receivable management should be automated to handle cash application, EDI, ACH and credit card payments seamlessly. A modern cash application system will be virtually manpower-free and automatically match payments and invoices, credits against deductions, etc., as well as initiating new transactions (for example, debit memos) from the cash application process.

Collections Management

Management of the receivables collection function is critical, yet receives little management attention, or technology investment. Starting with advanced systems to drive and track the process, educate and manage staff, and monitor results, there is much to do — but the payoff is significant.

A well-run collection function will employ automation that prioritizes, drives, and tracks collection activities governed by corporate rules and standard best practices as part of the system. We have seen performance variances as much as 30% between companies in the same business with the same customers, depending on how they operate and enforce their business rules. Imagine two similar $200 million (sales) companies, one with a DSO of 38 days and the other with 52 days. One has $8 million less cash than the other and more money tied up in working capital, quite unnecessarily.

Partner With An Agency

Leib Solutions is a B2B collection agency that delivers superior accounts receivable and debt collection services in the United States and internationally. Interested in our services? Contact us today!