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Should your business accept credit cards?
Recently, a friend travelled to Europe. She brought her credit card with the expectation of putting all of her purchases on it so she could keep track of everything in one place and not have to carry around cash. It makes financial sense to do that (as long as she pays off her credit card when she gets home, of course).
But she was surprised to discover that many stores do not accept credit cards. That is simply NOT the case in North America where almost every business has a credit card machine.
If businesses in Europe don't need to accept credit cards, should we accept credit cards here? There are a few reasons why European businesses don't accept credit cards that don’t necessarily apply to North America: First, Europe is made up of many small nations and it is only relatively recently that a few strong credit card brands have come to the forefront and offer real-time payment approval information. Second, some of the stores have been around for decades – or even hundreds of years! – and have survived this long on a cash-only policy. Third, European ideas of credit are different from North American ideas of credit (although Europeans are slowly adopting a North American attitude toward credit).
On the other hand, North American businesses accept credit because it allows for fast, easy payment without handling a lot of cash. Some small businesses will counter with the following objections: Accepting a credit card comes at a cost: There is a fee charged every time a customer uses a credit card. And, businesses run the risk of receiving "charge backs" when a customer contacts their credit card company and claims to have not received the goods for which they have been charged. There is a third risk in situations where businesses who charge ongoing payments to a credit card may find that the credit card is maxed out.
Although there are costs, the alternative is cash only. Cash only seems like a great idea because it carries no fees. However, a cash only ("European") policy comes with its own price: It's easier to steal cash; it's easier to lose cash; it's easier to counterfeit cash; and fewer customers carry cash with them when they shop.
So, should your business accept credit cards? The answer is: It's probably worth the cost.
Ranger Financial Services
214-206-8060
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Hitting Our Heads On the Debt Ceiling: What It is and Why It Matters
Recent news articles have highlighted a situation the United States Government is dealing with right now called "the debt ceiling" and many journalists are linking it to the debt crisis. But what is the debt ceiling and what how does it relate to the debt crisis?
Here's how:
Many consumers know all too well the problems associated with acquiring too much debt, reaching credit limits, and spending without discretion. When these things happen, consumers find themselves in debt, owing a lot of interesting, in collections, and even potentially facing bankruptcy. This isn't a surprise to anyone.
While this is the reality among individuals, the US government has discovered that it too is facing the same situation. The government borrows money, too, in the form of bonds and T-Bills. The government sells these, collects money, and spends that money on military and roads and pensions. When it collects taxes, it uses some of that tax money to pay back its "debt" on T-Bills and bonds.
Over the years, the government has spent a lot of money and the American economy was healthy enough that there was taxation and cash flow to handle this situation. (Sure, there was some debt but it was never a big deal). However, in recent years, the government has had to borrow a lot of money to help kickstart the American economy.
All that borrowing at the government level is no different than when a consumer gets a whole bunch of loans. At some point, the consumer will reach his or her credit limit – they simply cannot borrow any more. The debt ceiling is a Congress-imposed "credit limit" on the US government so that they cannot borrow any more money.
Along with exploring the possibility of spending less or raising taxes, the US government is increasing the amount of money it can borrow in order to pay for the various things that Americans have come to expect.
So, why does it matter to you? Just like consumers who increase the amount that they can borrow, increasing the debt ceiling isn't necessarily a good thing. Increasing the debt ceiling means borrowing more… which means paying more interest. It might be an effective short term solution but in the long term, the US government may get a call from a collection agency expecting full repayment of debts!
Ranger Financial Services
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Add Value With Your Finance or Accounting Department
When we think of various departments within the organization, we tend to divide them up into two groups -- those that add value and those that support the groups that add value. The sales, marketing, and manufacturing departments are often the value-adding departments that people think of. And departments like warehousing, administration, and HR are the ones that people think support the value-adding departments. Frequently, the Finance or Accounting Department is one of those groups.
However, the Finance or Accounting Department can play a far more valuable role. Here's how:
First, train your sales staff on how to do accounts receivables. When frontline staff better understand the accounts receivables, and when they can actively participate in their collection, more money can be collected.
Businesses resist this because they don't want to take sales staff away from sales. However, this group frequently has the best relationship with the customer. By collecting accounts receivables, the sales staff are not just contributing to sales, they are contributing to cash flow and profitability.
Second, the Accounting department can keep up to date records and share them with everyone.
Information is invaluable and should be shared among the organization. If there is a customer who has not paid their bill, the other departments should know -- perhaps they can help. As well, this also helps to address issues of customers who pay an accounts receivable to a low-level employee in a different department. That employee won't know what to do unless told.
Third, the Finance department can rework your reward system to reflect the importance of cash flow and accounts receivables.
The Finance Department can add value to the organization by adjusting the remuneration system so that commission-based sales employees are no longer paid only on sales but on money collected (I.e. Payment is made on sales minus accounts receivables). This keeps sales staff mindful of better qualification of customers and makes them a bigger part of the customer's purchase cycle.
The Finance or Accounting department is often thought of as one that supports the value-adding departments. However, this department can add value by enabling improved cash flow through better-managed accounts receivables.
Ranger Financial Services
214-206-8060
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Economic Implications of China

China's economy is just cooking right now! In spite of a political position which most Americans would call "oppressive", China's massive population is birthing a massive middle class, which is helping to prop up the global economy.
To help support this burgeoning middle class, China is no longer exporting as much of the metals and raw materials it once exported. Rather, it has started to import more and more raw materials. These raw materials help to build the infrastructure that the middle class requires. (This infrastructure includes roads, cities, power and water utilities, and it also includes the many products that the middle class can now afford).
A huge populace suddenly spending more sounds good… but is it? What are the economic implications for the rest of the world? Here are a few of those implications:
China's rising economic stature will indeed help to prop up the global economy. For the most part, this is a very good thing.
However, producers of goods and services might find it more lucrative to sell into China than to supply the needs of other nations. This could leave a product or service deficit outside of China, which will result in higher prices. A high risk factor is food – where North Americans could potentially export a majority of their foodstuffs to China, leaving North Americans to pay higher prices for food.
In addition to that, a current worldwide shortage of natural resources (including uranium and other minerals, particularly rare earths, which are used in portable electronics) will drive up prices of energy and consumer goods, because what little is available is being sent to China.
While the rest of the world is "licking its wounds" from the recent economic catastrophe, China is rising up as an economic power. It provides an exciting prospect of opportunity to the rest of the world to serve this new and very large market, but it can also result in higher prices almost across the board in products and services that many people take for granted.
So, what should you do? If you run a business, you have two opportunities: First, start building relationships and making inroads into China. It could be a huge economic frontier for your business. And second, shore up your local customer base and extend in-continent because – over the long term – these customers will continue to want to buy from you.
Ranger Financial Services
214-206-8060
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Top Tips for Account Receivable Commercial Debt Recovery
If you run a business that sells to other businesses (B2B), then you likely invoice your business customers. And when you invoice instead of expect payment up-front, you end up incurring account receivable commercial debt. Not all accounts receivables are bad – they're a necessary part of doing business. However, they need to be carefully managed. Here are some tips to help you manage your account receivable commercial debt recovery:
1. Send out invoices right away, as soon as the purchase is made. That way, you won't wait until the end of the month to send them out.
2. Keep your account receivable collection period short: Require payment in full within 30 days. By extending out your grace period to 2, 3, or even 6 months, you are risking a serious shortage in cash flow.
3. Offer a substantial discount if the customer pays in full before the purchase, and a slightly smaller discount if the customer pays the invoice in full within 30 days.
4. Before becoming too aggressive in how you collect, consider whether or not the customer will be a valuable customer to you again in the future. If they will be, consider third-party intervention or diplomatic arbitration rather than the more aggressive collection agency route.
5. Offer several payment plan options, including pre-pay and pre-and-post-pay options. That way, your customers can choose the one that works best for them.
6. Create a strict commercial debt recovery process and train all of your staff in how it works. You don't want to lose a commercial debt collection opportunity simply because someone asked a low-level employee how much they owe and the employee didn't know.
7. Maintain good relationships between your business and your customer's business to increase the likelihood of getting paid.
8. If a customer is taking too long to pay, use a combination of methods (phone, email, mail) to a combination of people in your customer's company (accounts payable, the finance manager, and even the CFO) to communicate what you owe.
9. Don't be afraid to use a commercial collection agency to work at getting your money. After all, it's your money and you did all the work and deserve to get paid for it!
It's okay to have accounts receivables in your business, but B2B collections doesn't have to be painful. Use these tips collect more from your business customers.
Ranger Financial Services
214-206-8060
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Recap of the economy 2008 to present
The economy moves in waves of boom and bust, with the stock market and the general populace fighting and contributing to this economic cycle.
Just a few years ago, the world was at a peak of economic activity: Businesses were making money, cash was easy to come by, and consumers and businesses were incurring debt because attractive interest rates allowed them to do so.
Then the level of debt became too much to bear and even though people were making good money, confidence in the stability of this system started to erode. And then the economy crashed. Around the world, markets crumbled and governments worked feverishly to keep their economies going. Personal and commercial debt could not be paid back. It was the most depressed economy since The Great Depression. In fact, it was dubbed The Great Recession.
It was sticky for a while. People simply didn't know what to do. Doomsayers predicted the end of the world. Many people lost their jobs and their homes as businesses ran out of money to pay employees and, in turn, people were unable to meet their obligations.
Through it all, the most important thing that people could cling to was that it was a cycle. The economy goes up and down, and even though the "when" is unpredictable, the fact that it does go down and then go back up could be counted on.
And now 2011 is here and the economy is back up again. It's not nearly where it was and many people will have to work for years to regain their eroded retirement funds or are simply overwhelmed by the responsibilities of and commitments to debt recovery.
Unfortunately, there is still one major hurdle to overcome before it can be said that the economy has truly recovered and is on its way to a highly robust period once again. That hurdle is inflation. Here's why it's a problem: When a person or a business goes into a debt, they can declare bankruptcy or they can pay back what they owe through B2C collections and B2B collections.
But when governments face financial challenges – as they did during The Great Recession – many governments solved the problem by printing more money. This is a problem because it increases the amount of money in the marketplace, and as a result, money becomes devalued.
Today, to truly create a healthy economy, governments will need to fight inflation. And then good times will truly be here again.
Ranger Financial Services
214-206-8060
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Why accounts receivables cost your business more than you realize

"When I first started in business," reports a colleague, "I extended as much credit as possible because I wanted to build up my customer base quickly. It worked. I got a lot of customers. Unfortunately, I nearly went bankrupt."

My colleague is not alone. This is a common practice among businesses that serve other businesses – to extend commercial debt to customers and invoice later. However, it's an extremely expensive business decision. Here's why:

Extending credit doesn't delay all expenses. It only delays the influx of money into your business. Your costs and expenses continue to add up and need to be paid (or else you'll be added to someone else's B2B collections list!)

Not only that, but your accounting department might continue to "count" your income for you on the day it was charged rather than on the day you actually received it. That means you could be paying tax on money you don't have (and may never get).

Some accounts receivables are necessary and expected. But they need to be managed so that you'll have enough cash flow to run your business.

So, what can you do about it? Start by providing customers with several options: The cheapest option to pay in full in advance. The next-cheapest option to pay in installments during deliver. The third cheapest option to pay in full at the end. And finally, the highest price to pay an invoice.

Another way to keep your accounts receivables in check is to train your sales staff to perform effective risk management. By simply keeping their eyes and ears open, they can spot problems before they arise.

Most importantly, remember that you are in control of your business. And although having a busy office with lots of customers seems like a good thing, it is only good if it results in paid invoices and cash flow.

Too many receivables are expensive and harmful to your business! Keep them on track and you'll keep your business on track.
Ranger Financial Services
214-206-8060
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Tips for better commercial collection

Collecting money from a business customer can sometimes be a challenge. Even though they are a business and probably know the difficulties that come with a growing list of accounts receivables, they seem to be passing along the same difficulties to you! Here are some tips to help you as you perform your B2B collections

1. Keep it professional: Don't abuse, threaten, or disparage your customers.
2. Build up a personal relationship with your customers before they owe you money! That way, when you deliver the invoice, you have a pre-existing relationship which makes it less likely that they'll keep you waiting.
3. Related to above: Provide indispensable value that cannot be matched by anyone. Your customers might stiff you and move on to your competition until they realize just how much better you are!
4. Deal with your accounts receivables early. The earlier the better. If you leave them too long, your customer could forget, move on to another provider, or even shut down. Invoice right after you've delivered the product or service instead of at the end of the month.
5. Offer discounts for up-front, in-full payments.
6. Do a risk-assessment on all of your customers. If they have been in business for a while and have a clean record in the community, feel free to take the risk. If they've been in business for 3 days, put them on a payment plan.
7. Get your sales team involved in risk management and collections. While they might balk at the idea of collecting instead of selling, you'll find that your accounts receivables could drop substantially because the Sales Department is suddenly qualifying customers more effectively!
8. Be prepared to move older accounts receivables to a commercial debt collection company. This can help you collect money to keep operating.

Commercial collections doesn't have to be difficult, and effective commercial collections will keep you in business.
Ranger Financial Services
214-206-8060
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Steps to easily collect more commercial debt than ever before

Steps to easily collect more commercial debt than ever before

Running a business isn't easy, and when customers refuse to pay, it can become even harder. No one wants to collect money and when you have an accounts receivable, it's much easier just to ignore it. One of the best things you can do for your business is to create a step-by-step accounts receivable program that you can implement almost automatically every time a customer owes you money.

Here is an example of how one might work and what you need to do (although your particular step-by-step program might be slightly different, depending on the business you're in):

Step 1 – Day 0 – Invoice the customer.
Step 2 – Day 30 – Send a reminder.
Step 3 – Day 45 – Call the customer.
Step 4 – Day 60 – Send a reminder.
Step 5 – Day 70 – Call the customer.
Step 6 – Day 90 – Send a reminder.
Step 7 – Day 100 – Send a letter indicating that you are about to either send them to a commercial debt collections company or consider litigation.
Step 8 – Day 120 – Enter pre-litigation phase. Contact a commercial collection agency.
Step 9 – Day 140 – If the commercial collection agency isn't interested in taking on the commercial debt, explore your court options.

Now that you have a rough outline of the stages, the next step is to create templates for each letter and scripts for each telephone call so you don't have to "reinvent the wheel" each time. Keep them simple, straightforward, and professional. Do not threaten but just state the facts.

With your letters and scripts all ready to go, put everything into files and keep them handy. When the date passes for the particular event, grab the letter, fill in the blanks, and send it off.

Accounts receivables are not a favorite activity for many business owners but if you make it really easy and "automatic", as we've described above, you'll improve your commercial debt collection and you'll collect more money!
Ranger Financial Services
214-206-8060
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Tips for better commercial collection

Collecting money from a business customer can sometimes be a challenge. Even though they are a business and probably know the difficulties that come with a growing list of accounts receivables, they seem to be passing along the same difficulties to you! Here are some tips to help you as you perform your B2B collections

 

1. Keep it professional: Don't abuse, threaten, or disparage your customers.
2. Build up a personal relationship with your customers before they owe you money! That way, when you deliver the invoice, you have a pre-existing relationship which makes it less likely that they'll keep you waiting.
3. Related to above: Provide indispensable value that cannot be matched by anyone. Your customers might stiff you and move on to your competition until they realize just how much better you are!
4. Deal with your accounts receivables early. The earlier the better. If you leave them too long, your customer could forget, move on to another provider, or even shut down. Invoice right after you've delivered the product or service instead of at the end of the month.
5. Offer discounts for up-front, in-full payments.
6. Do a risk-assessment on all of your customers. If they have been in business for a while and have a clean record in the community, feel free to take the risk. If they've been in business for 3 days, put them on a payment plan.
7. Get your sales team involved in risk management and collections. While they might balk at the idea of collecting instead of selling, you'll find that your accounts receivables could drop substantially because the Sales Department is suddenly qualifying customers more effectively!
8. Be prepared to move older accounts receivables to a commercial debt collection company. This can help you collect money to keep operating.

 

Commercial collections doesn't have to be difficult, and effective commercial collections will keep you in business.

Ranger Financial Services
214-206-8060
Find Ranger at the following

http://www.rangerfinancialservices.com

http://www.rangerfinancialservices.info

http://www.rangerfs.com

http://www.rangerfs.biz

http://www.rangerfs.blogspot.com

http://rangerfs.blog.com