At Alexander, Miller & Associates, our clients run into the same issues that most businesses face — overdue debts, cash flow issues, and a number of other financial troubles caused by business deals and payments that didn’t deliver. We make it our mission to help those businesses recover their losses no matter what industry they’re in.
That said, specific industries tend to face unique challenges. For example, one of the biggest industries that we serve is the transportation industry. Alexander, Miller & Associates has turned years of commercial debt collection experience into an industry leading role for transportation company commercial collection services, providing receivables solutions and collection services with proven results all across the nation.
Throughout our time working with the transportation industry, we’ve discovered that there are a few major issues that most companies run into when it comes to commercial debt collection. That’s why we employ a division of collectors that are well versed in DOT rules and regulations, bills of lading, and Section 7.
Most business owners are familiar with the daily challenges of operating their business, some even may be familiar with these regulations and transportation rules. Unfortunately, many of those same owners spend so much time focusing on running their business that they forget one of the more unfortunate aspects — sometimes clients don’t pay on time, or they don’t pay at all.
That’s where we come in. With our expertise and industry knowledge, we can help business owners focus on their main goal, which is actually running their business. You shouldn’t have to waste your time and money chasing down debts and cash that already belongs to you. In the process of helping transportation companies across the nation combat this exact issue, we’ve found five of the most common issues you might face while trying to collect on debts. Let’s explore those further.
Here are the 5 biggest obstacles that business owners, from our heavy equipment rental customers to our trucking transportation and freight customers face when it comes to collecting past due accounts and the commercial debt collection process:
When a customer doesn’t pay their account on time, it’s best to communicate directly over the phone or by email so you can assess the situation. The reason for this is that it helps you determine who might be struggling to get their payments out and who might be what’s called a “professional debtor”.
Sometimes, clients are simply a little behind and you don’t need a full on collections team. A simple, friendly reminder and resubmission of billing can be enough to nudge them back on track for payment.
But be on the lookout for people who consistently offer excuses, coming up with all kinds of reasons that they haven’t paid. Some of the most common things we’ve seen are: the billing wasn’t received, poor cash flow, there’s a dispute in reference to the bill, or constantly avoiding contact around the time a bill is due.
The two most effective strategies to prevent this are to come up with a preemptive solution to potential debtor “problems” or to work with an aggressive and professional collections agency. Develop preemptive solutions that make sense for your industry, or familiarize yourself with things like whether or not a client is shipping on set schedules or operating with a factoring program so you know to expect them to be able to pay.
Customers Going Out of Business
It’s a common fact of business, but many companies simply start and end throughout the year. Unfortunately, most creditors don’t expect their customers or clients to go out of business suddenly.
A strict accounts receivable management system and staying on top of your commercial collections process can mitigate the risk of bad debt. In the transportation industry, where funds are often dictated by the availability of work and a fairly competitive market or specific arrangements with major shipping companies, it’s good to get familiar with your customer’s habits and partnerships.
For general advice, it’s good to have a fairly rigid credit application process that includes credit checks or accounts for the volatility of your unique industry’s participants. Routine re-verification is also not a bad idea.
Should this process fail you, it’s important to address accounts as soon as they become delinquent, assuming you couldn’t catch and resolve any problems before this point. Don’t wait to collect.
The longer a debt goes unpaid, the less likely you are to see that money. You can use your best judgement if you’re dealing with familiar or long term clients, and industry fluctuations can impact your decision, but you should never let debts go unpaid or unaddressed for long if you hope to get paid.
This one is really similar to a company going out of business.
However, there are some more complicated hoops to jump through. Once a business files for bankruptcy, creditors are often required to stop their collection efforts. At that point, it’s up to bankruptcy courts to decide whether or not creditors will be able to collect outstanding debts owed by the debtor in question.
Secured creditors will have a better chance of collecting than unsecured creditors. However, there are still steps involved with becoming a secured creditor, and it needs to be done from the beginning instead of retroactively. Once you’ve been notified that a customer has filed for bankruptcy, creditors should file the necessary paperwork (including a Proof of Claim) with the bankruptcy court.
You can file this claim directly, but Alexander, Miller & Associates can also help you with the legal aspect of certain collections processes. Bankruptcy is a long and drawn out process sometimes, and it could take years before you get the money you’re owed, if at all, which is why it’s important to act fast.
Courses of Action for Commercial Collections
A lot of companies that go to collections are unfamiliar with the processes and options available to them. The reason this is often an issue that people face is that they don’t know how best to pursue their outstanding debts.
Basically they realize they need help collecting an outstanding debt that couldn’t be resolved through an accounts receivable process, but they’re not sure where to go after that.
There are several options, ranging from personal attempts at collection, such as expanded efforts and outreach to debtors by the company in question, to hiring a third party company to handle everything.
In truth, businesses see more benefit working with a reputable third party collections agency like Alexander, Miller & Associates. A majority of businesses that spend time trying to collect on their own soon realize that the legal matters and time sink that go into commercial collections start to cost them money, basically doubling their losses.
Losing the debt, and losing income because they’re spending so much time chasing the debt. A comprehensive commercial collections agency can handle pretty much every aspect of the collections process for you, and many, such as AMA, offer a no-collection, no-fee payment style. So we only get paid once we’ve successfully collected for you.
Getting Help with Debt Collections
The transportation industry is, at times, a fairly volatile industry. Between shipping and transport regulations and the availability of work, it’s a tough industry. On an individual basis, companies have to contend with competition, shifts in economic viability, and smaller more localized concerns like product hauling, rental agreements, leases and so on.
One of the biggest issues we see with commercial debt collection in the transport industry is that companies try to handle their debts on their own, only coming to us when the debt is very, very late into its life cycle. Due to the constant, on the go nature of the industry, the day to day focus is vital, but when it comes to debt collection, even 30 to 60 days can be the difference between getting paid and losing out on that debt altogether.
Commercial debt collection services are worthwhile for their expertise and resources. The key is knowing when to get help. The longer the account remains unpaid, the less likely it will ever be collected.
Alexander, Miller & Associates has a track record of working with customers in the transportation industry, from LTL, TK, Package and Express Delivery, Rail, Air Cargo, Ocean Freight, Logistics Providers and Supply Chain Managers.
Ranking among the top Houston collection agencies, please remember that Alexander, Miller & Associates is a diverse financial institution that specializes in fast track commercial collections and on-site investigations for businesses of all sizes.
We offer a wide array of collection services that assist you in getting paid prior to filing unneeded, lengthy and costly lawsuits. Our extensive experience in debt collection both locally in Houston and nationally have earned a reputation for trusted service and efficient results.
Contact us today if you have any questions, outstanding debts, or other commercial collections questions. We’re always here to help.