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Consumer and Commercial Debt Collection Florida

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Archive for the ‘Florida commercial collection agency’ Category

Is a debt as “uncollectible.” South Florida Debt Collections

Thursday, December 13th, 2018 | Florida commercial collection agency | No Comments

South Florida Debt Collection

South Florida Debt Collections

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 very 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.

From a tax-planning standpoint, 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.

As a commercial collection agency, we (the cash Flow Group) 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.

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.

Accepting Stock Instead of Payment?

Thursday, December 13th, 2018 | Florida commercial collection agency | No Comments

stock to cash,The Cash Flow Group

The Cash Flow Group a South Florida collection agency can help.

Sometimes, a company that cannot pay its bills may offer you stock, or equity instead of paying what is owed. If you have a personal relationship with the company, or truly believe that their financial problems are temporary, this can be a tempting option. It may seem that by accepting stock options, equity, or other collateral, you are avoiding the hassle of collecting on the debt. Perhaps you want to give the company a chance to fix things in the hopes that may be able to make more money in the long run.

Accepting stock or equity may also feel good emotionally. No one wants to think that they’ve been misled, or that they’ve made a bad decision about when to extend credit. Unfortunately, it is rarely a good idea. For starters, unless the company is public, it is very difficult to turn your stock into cash. If the company is public and having financial difficulties, their stock is probably not worth very much.

If you are determined to pursue this idea with a company that owes you money make sure to do your due diligence. Remember, once you accept stock in place of payment, you are no longer a vendor, you’re an investor. If this company’s business model and current situation means you wouldn’t invest in them under normal circumstances, don’t do it now when they’re already in trouble. Make sure that you also research any potential tax implications, IPO plans, and the effect that not receiving money immediately will have on your own cash flow. Make sure any agreement you sign is fully reviewed by a lawyer and does not leave you responsible for other debts the company may have incurred or may incur in the future.

Most importantly, before accepting stock options or equity, make sure to consult with a commercial collection agency like The Cash Flow Group. With our years of experience, there may be things we can do to get you the money you are owed. If you want to invest in a company, make sure that you’re doing so because you believe in the company and think it’s a good investment, not because you’re desperate to resolve a difficult situation.

Know when to Make a Deal on that Invoice? South Florida collection agency

Thursday, December 13th, 2018 | Florida commercial collection agency, Florida Debt Collection, The Cash Flow Group | No Comments

South Florida collection agency

 

Tips from THE CASH FLOW GROUP a South Florida collection agency, When it comes to companies that owe you money there are two basic types, those who won’t pay and those who can’t pay. With a company that can pay, but won’t, either because they are unhappy with the work or simply want to get away without paying, it’s best to act quickly. If a company is attempting to cheat or defraud you, your best course of action is to send them to a South Florida collection agency, as quickly as possible. However, if a company wants to pay you but is having a cash flow or other financial problem, you may want to consider making a deal.

The first step in deciding whether or not to consider a deal is to get a thorough understanding of the nature of the company’s financial problems. Ideally, you would start to notice signs of financial problems with a company before the invoice was due. That way you could be prepared and even discuss the problem before the payment is late. But, if an invoice is going unpaid, especially from a formerly trusted client, you may want to get on the phone and find out what’s going on. It’s likely that your contact in Accounts Payable, or on your project, will not be willing, or able, to share the full scope of the issue. In this case, you’ll want to speak with an executive or owner, someone qualified and able to share details.

The most compelling reason to make a deal is if a deal is the only way you’ll receive any of the money that you’re owed. If a company is on the verge of bankruptcy or closure, a deal may be your only choice for getting paid. If, however, the company is experiencing a temporary cash flow problem or is likely to rebound, you may want to negotiate a new payment date and add fees or interest. Be careful though, plans to recover from a financial problem are never a sure thing. By agreeing to wait to be paid you could wind up losing the short window of time in which you could be paid. Once a company goes to bankruptcy you are unlikely to ever recoup your money.

Deciding when, how, or whether to make a deal for owed money is complicated. Most people simply do not have the legal or professional expertise to know when it is and isn’t a good idea. That’s why we always recommend consulting with a professional commercial South Florida collection agency. A reputable commercial South Florida collection agency is trained to get you more of the money you are owed than you can on your own and can save you time and irritation. If you have an account that you’re considering making a deal on, give The Cash Flow Group a call first.

Successful Debt Collection

Friday, November 9th, 2018 | Florida commercial collection agency, Florida Debt Collection, The Cash Flow Group | No Comments

Tips for Successful Debt Collection by Phone and Email

What is one of the biggest mistakes you can make? People try to collect an unpaid debt while communicating in an unprofessional manner. Being in debt and collecting debt can both be stressful situations. There are many laws around debt communications.

Phone Calls

The phone is generally seen as the most effective and efficient way of collecting an unpaid debt. Some general rules to follow:
 

Be polite and professional.

No gum chewing, eating, or web surfing while calling.  Use please and thank you, and introduce yourself. One trick receptionists have used for years is to smile while on the phone.
 
Call at the right time of day. Some people work mornings, others don’t come into the office until the afternoon. By knowing when the debtor is available to talk on the phone, you can avoid playing phone tag. Ask the debtor what time they are generally available. Doing this can save a significant amount of time.
 
Take notes or record conversations.
If you are going to record a conversation, you must get permission first. But taking notes can be effective. By keeping a log of any agreements or issues, you can avoid repeating what you have already said. After the call, send an email summarizing the conversation and any commitments so there are no disagreements later.
 
Be careful about leaving messages.
It is very important that debt collectors never disclose private information. As a general rule when collecting from individuals, collectors should assume that any voicemail messages they leave will be heard by somebody other than the debtor.  If it is a business debt, full detail can be left on any business phone number and personal phone known to belong to a involved party.
 
Don’t blame or shame.
Having unpaid bills is stressful. It is not helpful to blame the debtor or imply that they have failed by not upholding their commitment to pay. Doing so will only make them upset and less willing to pay. Speak and find out why the debtor hasn’t paid their bills, and then try to work towards a solution to the problem. If they have a complaint about the product or service, find out why and try to resolve the complaint. If the customer doesn’t have the money at that time, ask them to prove this and have them suggest a solution. Forcing the debtor into a payment plan they know will default on will likely cause the debtor to be less interested in working with you.
 
Email
Although phone conversations are the preferred method for discussing unpaid debt, email also has an important role to play, especially when documents are being requested or sent, a paper trail is needed, or for quick follow ups and reminders.
 
If you can’t write, don’t.
Everybody knows their own skill set. If you are not a good writer, please do not write your own emails. Instead consider hiring an in-house or freelance copywriter to create a set of email templates for you that will help you communicate.
 
Be polite and professional.
Because tone of voice is so hard to determine in an email it’s especially important that you be polite and professional. Do not attempt to joke or be lighthearted about the situation. Keep your messages short and ensure they only emphasize the point you want. Shorter emails are more likely to be read in their entirety, and if you make the message you want to send to the recipient very clear they’ll be sure to get the point.
 
Being polite also includes responding to emails on time. If you want someone to respond to your emails, you must do the same for them.
 
Create a factual and short subject line. Your recipient will be far more likely to open the email if they know what it’s about.
 
Don’t send the message to people who don’t need to see it. Remember that any email communication can be used in a lawsuit if the debtor sues you for disclosing information to parties against regulation (especially in the case of consumer collections). Email communications are permanent, and the debtor will be able to find a copy of the message stored online with ease.
 
Communications are one of the tricky elements that sometimes makes it easier to hire a professional collection agency. If you’re having trouble finding the right way to talk to debtors, please give us a call.

The Cash Flow Group

Fort Lauderdale / Miami, FL

Toll Free: 800.226.2006

commercial collection agency

Monday, November 5th, 2018 | Florida commercial collection agency, Florida Debt Collection, The Cash Flow Group | No Comments

When it comes to companies that owe you money there are two basic types, those who won’t pay and those who can’t pay. With a company that can pay, but won’t, either because they are unhappy with the work or want to get away without paying, it’s best to act . If a company is attempting to cheat or defraud you, your best course of action is to send them to a collection agency, as as possible. Yet, if a company wants to pay you but is having a cash flow or other financial problem, you may want to consider making a deal.

Commercial collection agency

 The first step in deciding whether to consider a deal is to get a thorough understanding of the nature of the company’s financial problems. , you would start to notice signs of financial problems with a company before the invoice was due. That way you could be ready and even discuss the problem before the payment is late. But, if an invoice is going unpaid, especially from a trusted client, you may want to get on the phone and find out what’s going on. It’s likely that your contact in Accounts Payable, or on your project, will not be willing, or able, to share the full scope of the issue. In this case, you’ll want to speak with an executive or owner, someone qualified and able to share details.
 
Sometimes making a deal is the only way to receive payments. If a company is on the verge of bankruptcy or closure, a deal may be your only choice for getting paid. If the company is experiencing a temporary cash flow problem, you may want to negotiate a new payment date and add fees or interest. Be careful though, plans to recover from a financial problem are never a sure thing. By agreeing to wait for payment you could lose time in which you could receive. Once a company goes to bankruptcy you are unlikely to ever recoup your money.
 
Deciding when, how, or whether to make a deal for owed money can be overwhelming. Most people do not have the legal or professional expertise to know when it is and isn’t a good idea. That’s why we always recommend consulting with a professional commercial collection agency. A commercial collection agency will help get the money you’re owed. If you have an account that you’re considering making a deal on, give us a call first.

The Cash Flow Group

Fort Lauderdale / Miami, FL

Toll Free: 800.226.2006

What is commercial debt collections

Thursday, November 1st, 2018 | Florida commercial collection agency, Florida Debt Collection, The Cash Flow Group | No Comments

Commercial Debt Collections

Consumer Debt Collections

Commercial debt collections involves collection between a business (creditor), and a consumer (debtor. Debt collections like those are more governed than its counterparts.
 
To begin with, there are state laws controlling debt collection. For example, in Florida, collection agencies can operate without licenses in the state. This goes for collectors and debt buyers as well. A sole proprietor business can still collect a debt. Make sure that your business is not doing other business within the state.
 
What is the purpose of the Fair Debt Collection Practices Act?  Also, ensures the privacy of debtors is still protected. The FDCPA is now codified and amended to watch out for and prevent abusive practices. It is also designed to provide consumers with a venue to air their disputes. It has penalties enacted on distressing collectors. Finally, the FDCPA provides validation of accurate debt information.
 
FDCPA scrutinizes the collection activities of consumer debt collection agencies. It ensures that agencies don’t use abusive and deceptive tactics towards debtors.
 
One of the advantages to hiring a collection company is their knowledge of laws. These laws pertain to your case. Collecting debts on your own, while staying within the laws, can be a daunting task. This is especially true when dealing with consumer debt collection.

Commercial Debt Collections

Commercial debt collections is also called business-to-business debt collection. It involves debt payment from one business to another. This is assuming two things. That businesses are now sophisticated. They need to have discipline to comprehend their own rights and financial duties. Thus, commercial debt collection is much less controlled.
 
FDCPA does not apply to commercial debt recovery. This allows agencies to take a different approach to each claim.
 
The secret here boils down to the skills of the debt collector. Consumer debt collectors have different skills compared to commercial debt collectors. Not all who start from consumer debt collection are able to adapt to commercial debt collection. This is because commercial collection agencies are now specialized.
 
Part of a collectors job is to balance relationships. Recover money from the client’s debtor. But, do this while maintaining a good relationship between the client and customer. Yet, there are agencies that handle collections both from individuals and from businesses.

Which Is Easier To Collect?

There are pros and cons to collecting each type of debt. Consumer debt involves compacted laws and regulations. Commercial debt collection may need specialty skills or an effort to maintain a relationship with the client. Either way, debt collection is often complicated. Anyone attempting to collect debts can generally enjoy the help of an experienced collection firm.

 

The Cash Flow Group

Fort Lauderdale / Miami, FL

Toll Free: 800.226.2006

Commercial Collections Agency

Friday, October 26th, 2018 | Florida commercial collection agency | No Comments

Commercial Collections Agency

credit card debt blog

 

Working With A Commercial Collections Agency

You’ve done your due diligence. You have selected the right commercial collection agency for your business’ needs. So, what now? You may feel like your work is now done. You have handed your debt collection efforts off to the professionals. It is still important for you to take an active role in the relationship with a collections agency. You hired the agency for their expertise, experience, and sound judgement. Still, the agency can better do its job if you take an active role in your working relationship.

Think of your agency as a partner, somebody to work with and not only an outsourced contractor. Meet with your agency’s representative often to review the status of your accounts. This option may be unavailable due to logistics. Do attempt to have regular communication with them via phone or email.
 
Be sure to insist on prompt responses to your calls or emails. It is not too much for you to ask for phone calls and/or emails. They should be responding to you within one business day. In doing so, make sure you reciprocate. Respect goes both ways.

Tips/Strategies

When working with this agency, be sure to provide them with as much information about the debt and debtor. This will ensure the highest possible rate of returns on your outstanding receivables. The more information this agency has the more money you will be able to collect. That information should include the following:

  • Any names associated with the debtor: Debtor’s name, spouse, friends, relatives and/or neighbors, including any nicknames, maiden names, aliases, etc.
  • Addresses: business and personal.
  • Contact information: telephone numbers, business and personal, including cell phone numbers, and any and all email addresses associated with the account.
  • Purchase and/or transaction details, including dates, amounts, type of, etc.
  • Any paperwork related to the transaction, including contracts and credit applications.
  • Any and all correspondence you have had with the debtor, including any feedback or acknowledgments to your debt collection efforts you have received.

Provide the above information and maintaining communication when working with the agency. This will help reduce frustrations. It could also very well speed up the commercial collections process.

If you are a business owner trying to collect on past-due accounts, The Cash Flow Group can often help.  Contact us today!

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

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