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4 Things Debt Collectors Know That You Don’t

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4 Things Debt Collectors Know That You Don’t

By Dean Kaplan, CEO and President, The Kaplan Group

Cash flow is more important than ever. In the middle of a pandemic, very few businesses can afford to have clients owe them money. This means many businesses that used to be more laid back about collecting from late-paying clients are getting serious. As a commercial debt collector, there are things I know about the debt collection process that may surprise you.

1.Nice gets results.

There’s a stereotype of debt collectors as angry and threatening. But most successful debt collectors know that to be effective, you have to listen to people and form a relationship. Your approach to collecting from a client is highly dependent on the reason they haven’t paid. Without listening, you don’t know if a debt isn’t paid because the client is temporarily in trouble, about to go out of business, just disorganized or has a dispute. The more you can get people to talk, the more information they’ll reveal. It’s possible that the debtor will become upset or embarrassed during the conversation. But, the collector must stay calm and reasonable.

2. Debt collection starts before you sign the contract.

Having a solid credit application and laying out terms on all your contracts can make a huge difference in your debt collection. Your credit application should include complete contact information and layout any payment terms, including interest and late fees. Interest and late fees often provide good negotiation points for collection agents. I have frequently offered to waive late fees in exchange for prompt and complete payment.


Make sure that the terms on your contracts and invoices match the terms on your credit application. A reputable collection agent will want to see complete documentation of the agreement and debt. Although I try to avoid going to court, I will not accept a case if I don’t think it can be proved in court.

3. You should avoid going to court, and threatening to do so.

Speaking of court, although many people pay on debt because they’re afraid of legal action, you want to try to avoid it whenever possible. The contingency rate (the amount you pay the collector) is higher if you have to sue and the process is prolonged. This is especially true now when courts are backed up due to the pandemic. A default judgment might get issued within six months, but trial dates are now being set 18 or more months from the filing date. By that time, the customer could be out of business. Once you win a judgment in court, the money still has to be collected, which can take years in some situations. You should never threaten to take a client to court. Once you issue that threat, you have to follow through. If you threaten to sue and then hire a collection agency instead, you’ve made their job harder. Likewise, you should not threaten people via social media. Doing so can backfire and expose you to legal action.

4. Prompt debt collection can save business relationships (and time and money).

When a client owes you money, your first step should be to cease doing work or selling products to them. Unfortunately, this means your client will need to find another vendor. If you spend months or years trying to collect from them, that just gives them more time to build a relationship with another vendor. By sending the invoice to a collection agent promptly, you shorten the amount of time before you can begin working with the client again. Hiring a collection agency on a contingency basis can also save you time and money. Your staff can be focused on their regular tasks and reputable agencies have tactics for increasing pressure to get money flowing faster.

As this new year begins, you’ll want to make sure that all of your accounts are in order. Thinking about debt collection both now and in the future can keep your cash flow steady.

The Kaplan Group, a commercial collection agency specializing in large claims and international transactions. He has 35 years of manufacturing, international business leadership and customer service experience. Today, he provides business planning, training and consultation to a variety of global companies.

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A Few Things to Check Before Hiring an Electrician

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A Few Things to Check Before Hiring an Electrician

Hiring an Electrician

Many homeowners attempt to do home improvement projects themselves, and the results are often disappointing. However, trying to handle electrical work independently can lead to costly errors and injuries. Discover a few things to check before hiring an electrician to get the job done right and stay within the budget.

Proper Training

When looking for an electrician, the first thing to consider is whether they are properly trained. The electricians should attend a vocational school or other recognized institute to learn how to perform the work correctly. Discuss the training process to find the right team for the job.

Review Experience

Comparing electricians includes reviewing their relevant experience performing similar work. Homeowners should discuss the project scope with potential electricians and determine whether they have experience in that area. Also, ask for recommendations and referrals from previous satisfied customers.

Check Reviews

Once homeowners have a list of prospects, check online reviews to narrow down the possibilities based on customer experiences. Often, people discover more about an electrician or other service providers by reading reviews and talking to others. Also, discuss referrals with neighbors, co-workers, friends, and families to determine which services handled the work most efficiently.

Licensed and Insured

Verify your state’s requirement for license and insurance and then ensure the electrician is compliant to protect your most valuable asset. It is often tempting to hire an unlicensed or uninsured electrician to cut costs, but that often adds up to spending more money in the long run. Plus, you could be liable if an accident or injury occurs on your premises, adding even more to the costs.

Verify Credentials and Permits

The first step to verifying an electrician’s expertise is to inquire about licenses and insurance. The next step is to verify these credentials and permits to ensure they are valid and current. A quality electrician will immediately provide documentation for customers to verify.

Talk to Several Electricians

After comparing reviews and verifying credentials, consult with several electricians to find the right one for the project. While all of them might be qualified for the job, homeowners should find an electrician that understands their vision and wants to work with them every step of the way. Take notes during the interviews to review and determine the best candidate for the job.

Compare Costs

While qualifications are crucial to getting the job done correctly, homeowners must also stay within their budget to avoid financial stress associated with unexpected surprises. An electrician should provide a precise estimate and include everything to be done to complete the project for homeowners to plan for payment. The goal is to find a qualified electrician that provides all the services needed for the most competitive price. 

Look for Outstanding Customer Service

Finally, it helps to work with electricians dedicated to providing the highest level of customer service and that stand behind their work. Inquire about warranties and other guarantees to verify the project will be completed according to specifications. Then choose the electrician who communicates clearly and makes you feel comfortable about their skills.

Hiring an electrician is often critical to getting the job done right and avoiding additional costs related to injuries and errors. Use this checklist to find a qualified electrician that provides outstanding service within your budget.

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