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Consumer and Commercial Debt Collection Florida

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Florida Debt Collections and Payment

Friday, October 19th, 2018 | The Cash Flow Group | No Comments

Florida debt collections and payments – advice from The Cash Flow Group.

Florida Debt Collections

How to Avoid Preferential Debt Payments

Everyone has creditors they would rather pay back before others. This includes debts owed to family or friends. You should pay back these debts before bankruptcy. Then they are now considered preferential debt payments. This would allow the bankruptcy trustee to recover any payments made. Preferential payment helps to make payments distribute more even amongst all creditors.

How long must you wait in order to avoid a preferential debt payment?

This will vary depending on your relationship with the creditor. A preferential debt payment is a payment made within 90 days of filing for for bankruptcy.
 
Three important things to note:
 
1. Payment must exceed $600
2. You must be insolvent at the time of payment
3. The creditor must receive more than they otherwise would in a bankruptcy settlement
 
Close friends and family have even stricter terms. These payments made within 1 year before filling for bankruptcy are being considered a preferential debt payment. The same three requirements will still apply.

What happens when a preferential debt payment occurs? 

What is a preferential debt payment occurs during the bankruptcy process? In that case, the trustee can recover (clawback) the full amount paid.
 
This is not illegal unless the payment was being made to defraud creditors or hide assets from the court.
 
In most cases, the payment is being clawed back from any of the involved parties. The payment will then become part of the bankruptcy settlement.

How to avoid preferential debt payments?

The easiest way is to simply avoid having payments fall within the designated periods. This means you may have to avoid filling for bankruptcy until these payments have cleared the preferential period. You should not do this with the intent of defrauding your other creditors or in an attempt to hide assets though, or else you may risk charges for your actions. One way to avoid this confusion is to stick to a regular schedule for payments, as to avoid the appearance that these payments were made purposefully to favor one party over another.

This article should not be taken as legal advice. Yet, the information provided should help you decide whether you have given or received a preferential payment. If you believe you may have an issue, we suggest you seek the advice of a lawyer.

Do you have questions about preferential payment?  Feel free to contact us today!  We look forward to hearing from you!

Commercial Collection Agencies Florida – 5 End of Year Tasks

Friday, October 5th, 2018 | The Cash Flow Group | No Comments

Commercial Collection Agencies Florida – The Cash Flow Group is here to help.

5 End of Year Tasks for Your Business

Commercial Collection Agencies Florida

Commercial Collection Agencies Florida

The end of the year always brings some predictable events. You know that magazines and websites will be releasing their lists of “best movies” or “most memorable events.” You know that car dealers and other large item retailers will be trying to sell off expensive merchandise. You know payroll departments will be preparing to fill out W-2 forms, and accountants will be getting ready for tax season. As a commercial collection agency there are certain tasks we’d love to see business owners add to their annual end of the year to-do lists.

Determine Which Invoices Need Attention

Once an account is 90 days overdue, there’s already a 26% chance that it will never get paid. At 7 months overdue, there’s only a 50% chance that you will get paid. Ideally, business owners would routinely check for late invoices and turn them over to a reputable collection agency while there was still a great chance of getting the invoice paid. But at the very least, reviewing past due invoices is something that should be done at the end of the year.

Update Terms and Conditions

The world has changed a lot in the last five years. If you haven’t updated your terms and conditions on credit applications recently it may be time to make a change.

Review Procedures

Are your internal collection policies and procedures working? Can you make changes to improve efficiency and effectiveness? Are you making phone calls when you should be writing emails to get answers in writing? Are you writing emails when you should be making phone calls? Is there anything you could automate, such as overdue notices, which would make life easier for your Accounts Receivable department? An annual review of your policies and procedures may help you identify both problem areas and strengths.

Update Payment Procedures

Strangely enough, many businesses, especially smaller ones, often make it difficult for clients to pay them. If you’ve resisted allowing online credit card transactions, or PayPal transactions because of fees, it’s time to rethink those ideas. Services such as PayPal and Square may make your business more time efficient. Don’t forget to update your check payment procedures as well. Services like Vericheck can help you avoid accepting bad payments.

Check on Your Providers

When you hire a lawyer or a credit collection agency you’re hiring a company that will represent you. The last thing you need is someone from outside your company creating legal or reputation hassles for you. The end of the year is a great time to check in with the reputation of any service provider that represents you. Check Better Business Bureau ratings, online reviews, and professional organization memberships.

The end of the year is a busy time and adding more “to dos” to your existing task list can be daunting. But, making sure that you’re on top of unpaid invoices and payment policies can be a great way to ensure that you start the next year off right. If you’re end of the year tasks reveal debts you need help collecting, make sure to let us know, The Cash Flow Group is here to help.

Commercial Collection Agencies in Florida – Business Management

Tuesday, October 2nd, 2018 | The Cash Flow Group | No Comments

Commercial Collection Agencies in Florida – The Cash Flow Group Helps with Business Management

How Will I Manage My Debt Collection Business?

Commercial Collection Agencies in Florida

Commercial Collection Agencies in Florida

The answer to this question varies depending on your personality and business experience. Find good, honest people, and surround yourself with those people. You may have pay a little more for those types of people, but they will save you mounds of headaches in the long run.

Ask yourself how you would like to be managed, and then devise a way that would suffice your philosophies and beliefs.

The collection industry is often a fast paced, high stress environment. Make sure that you hire good help that know how to work with people, are not prone to offense, and are teachable. Likely you will be working in your business and with these people on a daily basis. They will learn to trust and respect you.

Help them succeed by providing them a comfortable work environment. Give them the right tools. You are helping your own business succeed by doing these things.

It is important that you are a part of your debt collection business. Most small business owners make the mistake of getting “stuck in the business”. They also don’t have time to “run the business”. Most small business owners get stuck in the day-to-day grind of the business. They can’t get themselves out of the day-to-day tasks long enough to run a successful business. Hire good help that you can trust. This way you can delegate some of the day-to-day responsibilities of the business. Now you have time to “run your business” and “expand your business”. Be cautious though, you don’t want to give all responsibility away. You need to still be involving yourself in your business. At least enough to know what is going on and provide accountability to others.

Regardless of how you decide to manage your business, the “golden rule” applies more so now that you are a manager.

The Cash Flow Group can help with advice and answer any questions you might have about your debt collection business!  Contact us today!

 

Debt Collection in Florida – Payment Processing 101

Tuesday, October 2nd, 2018 | The Cash Flow Group | No Comments

Debt Collection in Florida – The Cash Flow Group:

Payment Processing 101

debt collection in florida

debt collection in florida

If you run a busy business, then you know all too well that the way payments are processed has greatly changed over the years. While some people still pay with cash or check many customers choose alternative methods. There are many different ways to make a payment these days and offering them to your customers is a great way to increase sales. Today we are going to learn about several of these payment types and how they can boost your business and make life easier.

Pay by Text

A fairly new payment process that is taking the commerce world by storm is pay by text. The process of payment by text is very simply. The two-step process begins when the customer sends you their mobile phone number. Then you place that number in the payment system and a text message is generated and sent back to the customer. The customer will then have the option to pay for the good or service with just one click. This process is very fast and it speeds up the checkout process.

Below is a list of businesses that could benefit from this payment method.

  • Retail locations: No matter what type of retail location you own, you could greatly benefit from pay by text. Those long lines in your shop during the holidays season can be quickly processed using this mobile payment method.
  • Food establishments: Whether you own a high-end restaurant or a trendy food truck, processing payments quickly is always in your best interests. So why not offer your customers an option to pay by text? It will speed things along and there will be no need for them to wait around for a check.

High Risk Payment Processing

This is another area of payment that deals with those establishments that are considered a high-risk. If your company has been labeled high-risk, chances are you will have a hard time finding a company to process your payments. When this happens, you will need to seek out a payment company that specializes in these services, that will be willing to work with you.  But you might be asking yourself how did you became a high-risk merchant in the first place?

Below is a list of reasons why you might be deemed high-risk.

  • You have poor credit: If you are just starting your business and your credit score is poor you might be placed in the high-risk category.
  • A history of chargebacks: If your business has had a lot of chargebacks in the past you might be dropped by your payment processing company. Trying to find a new one might be difficult if you were label a high-risk.
  • An industry with a high fraud rate: If you are doing business in an industry that is known to be plagued with fraud you are high-risk. Some financial services companies such as check cashing companies fall into this category. Also, many online-only merchants will fall into the category of high-risk companies due to the fraud levels associated with online transactions.

Utility Payment Processing

Another huge industry is the utility industry. People of all walks of life pay their utilities each and every month. But keeping track of those payments can be difficult to handle alone. If you are a utility company that is looking for the best way to process payments, chances are in-house is not the best option. Hiring someone else to handle your payments for you can lift the burden off you. This will allow you to focus on other aspects of your company.

Below are several utility companies that can benefit from this service.

  • Electric companies
  • Gas companies
  • Sanitation companies
  • Water companies

Working with A Payment Processor You Can Trust

When you are looking for a payment processing company for your business, finding one you can trust is very important.

For any questions you have, The Cash Flow Group is here to help!  Contact us today!

Debt Collection in Florida Advice for Loans

Sunday, September 30th, 2018 | Florida Debt Collection | No Comments

Should You Lend Money Friends or Family?

Debt collection is The Cash Flow Group’s specialty and we are here to help!

It is a well-known rule that lending money to family members or friends should not be done. Shakespeare admonishes us with his immortal words, “Neither a borrower nor a lender be.” However, it is the words that follow that inform us of the consequences, “For loan oft loses itself and friend.” This is just as true today as it was in the time of Hamlet — if you loan money to a friend or family member, you can expect to lose both the money and the relationship. In a money-etiquette survey it was found that 57% of people have seen a relationship ruined because the borrower didn’t repay the loan. Still, many people who are in a position to do so feel compelled to help a close friend or family member in their time of need; and that doesn’t have to be a bad thing as long as you go about it with your eyes wide open.

Here are some things to consider when your friends asking for money:

What’s More Important – Repayment or the Relationship?

If someone approaches you for a loan, chances are they aren’t creditworthy enough to qualify for a loan from a lender. So, you know going into it you are taking on the risk of not seeing all or some of the money again. The question becomes whether repayment of the loan or the relationship is more important to you. You should know in advance how you would handle a situation in which the borrower gets behind on payments or no longer returns your calls. You can expect things to get very awkward, especially if the person is at family events or around town. Alternatively, if you truly value the relationship, you can treat the loan like a gift.  The person will likely try to repay you as if it was a loan, but the pressure is off the relationship.

Are You Helping or Enabling?

While you may have the right intent, you may be hurting the very person you are trying help. If the person needs money to cover basic living needs or to pay off credit card debt, loaning them money may only exacerbate their financial problems. What they might really need is financial counseling or help with finding alternative sources of income. If you do loan them money, do so under the condition they seek the help (or offer it yourself) they need to turn things around.

Don’t Make it Open-Ended.

The problem with loaning money to a friend is they are often open-ended based on a handshake with no specific terms for repayment. That leaves both parties in a state of limbo with no expectations as to when the loan is to be repaid. It also creates a false notion in the mind of the borrower that there is no sense of urgency to repay the loan, especially when other things come up that relegate loan payments to low priority status. Without clear expectations or specific loan terms, it becomes difficult to approach the borrower about payments. If you are going to loan money, put it in writing with specific terms.

Is the Loan IRS Compliant?

Lending money to family or friends is often interest free, which is not a good idea.

First, it diminishes the value you place on the money you loan someone; secondly, it could put you at odds with the IRS. Charging interest is not unreasonable, especially when it is done at below-market rates. The IRS expects you to charge interest on a family loan if you don’t want it to be treated as a gift for tax purposes. The IRS doesn’t care about small loans made to children. Loans of $10,000 or less are not subject to gift tax rules if they are not used for investments. However, larger loans could show up on the IRS radar if appropriate interest is not charged. To avoid treatment as a taxable gift, the loan needs to be in writing with the amount, terms, and rate of interest clearly defined. The IRS requires a minimum interest rate to be charged which is reported as income by the lender. If the loan is made for a down payment on a house, the borrower may deduct interest charges, but the loan must be secured by a lien on the home.

What are the Alternatives?

One alternative is to just say “no.” That may be hard to do, but, in many cases, it could be the right thing to do. Or, you can say “yes,” but with conditions. First, is that they at least try to obtain a personal loan on their own. While you don’t want them to get stuck with a “payday” type loan, there are alternative lending sources which can offer reasonably priced personal loans for people with less than good credit.

The Cash Flow Group is here to answer any questions or concerns you might have about loaning money.  Contact us today!

Debt Collection Tips and Strategies

Thursday, September 27th, 2018 | The Cash Flow Group | No Comments

Strategies For Improving Collection Rates – PROVEN!

The Cash Flow Group in Miami

 

Debt collection tips from The Cash Flow Group – Taking a few safeguards can improve your success when collecting on your receivables. I have found that basic strategies are usually the most effective. In order to increase the effectiveness of your collection process, you should:

1. Have a Written Credit Policy 

Follow this on a consistent basis.

2. Know Your Customer

Is your customer an individual, a sole proprietor, a partnership, or a corporation? Businesses often use fictitious names and acronyms for their businesses. It is important to clearly establish who is responsible for the obligation.

3. Plan for Collection Problems Before They Happen.

Your credit agreement or application should provide for provisions for attorney’s fees, interest at the highest rate allowable and late charges for a delinquent account. In order to recover attorney’s fees, most courts require a written agreement signed by an authorized representative of the customer.

4. Use Personal Guarantees 

Especially when you are dealing with new companies that do not have a credit history and will try to escape personal liability by creating a corporate account.

5. Have a Detailed Credit Application

All of the above, and more, should be contained in a comprehensive credit application

6. Obtain a Security Agreement

An agreement that can be used to create a lien on the equipment or merchandise sold to protect you in the event of a default or bankruptcy filing.

7. Keep all Correspondence Between You and Your Customer

Letters or emails received from your customers may admit the liability in question. Phone conversations should be followed up with a letter or email confirming the conversation. A letter or email received from your customer that you do not agree with should be responded to delineating the reasons for the dispute. Most importantly, once an account is in dispute and the customer has defaulted you must act quickly. The age of the account will be one of the main factors that will impact your ability to be able to collect. Statistics show that 90 days after the account is past due, you have less than a 75% chance of collecting it. The percentage quickly shrinks every passing month and after 12 months, there is only a 25% possibility of collection.

Get a hold of us at the Cash Flow Group with any questions or concerns.  We are here to help!

Florida Commercial Collection Agency

Tuesday, September 25th, 2018 | The Cash Flow Group | No Comments

Steps to Making Powerful Commercial Collection Calls:

Florida Commercial Collection Agency – If you don’t have a predetermined strategy in place, you’re probably spinning your wheels – being ineffective and costing your company money.

  1. Know your customer and their business. Are they impacted by seasonal cash flow etc.?
  2. Deciding what strategies you will use to stay on track.
  3. Set goals for yourself. For example – reduce DSO by 12% to improve cash flow.
  4. Deciding and outlining which strategies you will use to achieve its goals.
  5. Create effective call scripts so the conversation flows well and you can effectively manage objections and/or stall tactics.
  6. Measure your results to see what works and what does not. Establish key performance indicators (KPI) to help benchmark future results/ activities.
  7. Make detailed notes of your conversations with your customers. Before hanging up the phone – provide the customer of a recap of your understanding of the conversation. Better to catch misunderstandings now.
  8. Try to establish quickly if the customer is slow paying because of a dispute or cash flow issues. You can increase customer satisfaction by simply listening. If there is a legitimate dispute – deal with it. If it is a cash flow problem – see if you can work with the customer.
  9. Be decisive. If you are getting many promises but no meaningful action (money) then consider bringing in a professional collection agency or lawyer. If you don’t follow through – your customer will take advantage of you.
  10. Consistency is key. Consistent follow up – consistency doing what you say you’re going to do. Customers will soon learn that your invoices get paid before others.

Please call our collection agency at (800) 226-2006 today with any questions or concerns.  The Cash Flow Group is here to help!

 

Debt Collection in Florida

Tuesday, September 25th, 2018 | Florida Debt Collection | No Comments

DEBT COLLECTION MYTHS BUSTED

Debt collection can be a taboo subject. There’s a lot of misinformation about debt collection floating around the internet, so The Cash Flow Group is here to set the record straight. Here are the biggest myths about debt collection busted:

You Can Pay the Original Creditor Instead of the Debt Collector

Other companies hire debt collection agencies to collect for them, called third party agencies. Or, they sell their debt to a collection agency, meaning the original creditor no longer owns the debt. Either way, the collection agency is contacting you for a reason and you cannot bypass them. The good news is, however, that most collection agencies make it as easy as possible to pay back a debt.

Debt Collections Won’t Impact Your Credit Score if You Pay It

When a debt goes into collections, it has most likely already negatively impacted your credit score. When you refuse to work with a collector, it can cause further damage. It’s best to pay your bills on time and avoid collections altogether, but if you are contacted by a collector, just cooperate and pay or explain your situation. It’s a collector’s job to resolve debt, so they are most likely willing to work with you and figure out some options for how you can pay the debt.

If You Avoid Collectors They Will Go Away

Avoiding collection calls will only make the situation worse and damage your credit score. Plus, collectors can help by giving you options to repay your debt. It’s best to cooperate with collectors and try to explain your situation.

The Fair Debt Collection Practices Act Protects All Debtors

According to Investopedia, the Fair Debt Collection Practices Act (FDCPA) is “a federal law that limits the behavior and actions of third-party debt collectors who are attempting to collect debts on behalf of another person or entity.” In short, the FPCPA protects debtors from abusive, unfair or deceptive debt collectors. However, the FDCPA only protects consumer debtors, not commercial debtors. Although there are currently no federal laws controlling commercial debt collection, most states have statutes which govern commercial debt collection.

Smaller Debts Do Not Go Into Collections

While some agencies don’t bother with smaller amounts, others specialize in collecting smaller amounts of debt because it can add up over time to create good revenue. There’s no way to tell if a debt will go into collections or not. Basically, anything can go into collections and harm your credit score. It’s best to just pay what you owe.

Debt Collectors Only Care About Getting Your Money

Debt collectors’ jobs are to resolve debt, not just collect it.They will work with you on payment plans, recommend programs to get out of debt. So, if you’re contacted by a debt collector, see what your options are and what they can do to help.

Hiring a Collection Agency is Expensive

Most collection agencies operate on a contingency-fee basis, meaning if they don’t collect, you don’t pay. Others will charge a flat fee. When you hire a collection agency you are hiring experts who can increase their sales by collecting more money for their customers.

Businesses that Use Collection Agencies Lose Customers

If you choose a good collection agency, you won’t lose customers. This would only be the case if the agency uses illegal tactics to collect debt, like threats or harassment

Contact The Cash Flow Group for any questions you may have about collections!  We are here to help.

 

Commercial Debt Collection in Florida

Monday, September 17th, 2018 | The Cash Flow Group | No Comments

Protect Yourself from Fraudulent Checks

Commercial Debt Collection in Florida – During the holidays and the huge sales thereafter is a hot time for bad checks. It’s certainly not limited to holiday time, but it seems that criminals take a liking to the holiday season in ways that wreck it for the rest of us.

No business is immune. Large, small or mid-sized, every company must take precautions.

A few tips from Costco Service Provider Harland Clarke can help you and your employees spot fraud before the damage is done. Here’s what to look for when examining a paper check:

  1. Missing routing or bank numbers
  2. Low check number as it may indicate a newly opened account
  3. Missing address
  4. Handwritten address
  5. Missing bank name
  6. “Void” printed anywhere on check
  7. Glued, taped or stapled check
  8. Obvious erasures or white out portions
  9. Missing signature
  10. Unusually large purchase from unknown customer

Security features, like a watermark are a good sign that the check is legit. You may want to make a quick call to the bank before you finish the transaction.

As a business owner, you have the right to protect yourself. If the check just doesn’t feel or look right, request another form of payment.

Florida Debt Collectors and Tax Write-Offs

Monday, September 17th, 2018 | Florida commercial collection agency, Florida Debt Collection, The Cash Flow Group | No Comments

Collecting Uncollectible Debts and Tax Write-offs

Florida Debt Collectors, The Cash Flow Group is here to answer your questions!  One question that business owners often have to wrestle with at tax time is whether or not to write off a debt as “uncollectible.”

If your business uses a cash basis accounting system, this isn’t an issue for you. In a cash basis accounting system, you don’t count money that you’re owed until it’s paid to you. You can still write off any expenses related to an unpaid invoice, but you do not owe taxes on any unpaid income. If you are a large company this also is unlikely to be an issue for you. Large companies tend to use a reserve form of accounting and have a “bad debt reserve” to which they apply bad debts.

However, if you are neither a very large or very small company, you most likely file your taxes on an accrual basis. In accrual basis accounting, the unpaid invoice shows up as income on which you owe taxes. However, if you never collect that money, you can write off the amount as a bad debt expense.

Tax Planning

It is usually best to take your write off as soon as possible so that you get the tax deduction now, instead of later. The only time taking the deduction later would be better is if you are expecting to be in a higher tax bracket later on. This is primarily a concern for sole proprietors and S corporations, whose annual income fluctuates more widely. However, even if you expect to change tax brackets, you can not randomly decide when to write off debts. There are no hard and fast tax rules about when you can consider a debt “uncollectible,” but the IRS does like to see consistency in your tax filing methods.

Generally, it’s hard to justify classifying a debt as “uncollectible” if the debt has been owed for less than 90 days. But, some warning signs that a debt may be uncollectible, even if it’s been less than 90 days, include a company declaring bankruptcy, a company refusing to answer communication, a company stating that they will not pay you, or a company simply disappearing. Once you have turned a debt over to a collection agency, you are also justified in writing it off on your taxes. However, if the collection agency is able to collect, you will owe taxes on the amount collected.

We recommend that you not wait until tax season to think about how you will collect on unpaid invoices. We advise clients to consider professional help with unpaid invoices that are 90 days or more overdue, or when they start to notice any of the warning signs that a business may not be willing or able to pay its bills.

Debt Collecting

Writing off bad debt is helpful to your bottom line, but what’s more helpful is actually collecting on that debt. For example, imagine that your company is in the 33% tax bracket and a company owes you $10,000. If you write that off as bad debt, you’ll save $3,300 in taxes. However, if you hire a reputable collection agency that charges 20% of the amount collected, you could get $8,000. Earning $8,000 is clearly better than saving $3,300.

At The Cash Flow Group, our goal is to make sure you are paid the money you are owed, so that you write off as few uncollectible debts as possible. Please reach out and let us know how we can help.

The Cash Flow Group, Inc

3389 Sheridan Street

Suite 135

Hollywood, FL 33021

Email: info@thecashflowgroup.com

800.226.2006 Toll Free

© 2018 The Cash Flow Group, Inc. All Rights Reserved.