Michelle Dunn’s Credit and Collections Blog

This is the big question of the day, the month of the year! I have been swamped with business owners asking me how they can get paid when their customers are suffering with job loss, house loss and the rising prices of everything. I want to share with you some tips that will help you to get paid while the economy is suffering:

• Get paid at the time of service
• Invoice customers on a regular basis and as soon as the work is complete
• Act early - when an account reaches 30 days, take action
• Be as flexible as you can with payment plans
• Have a strong contract
• Don’t extend credit blindly
• Use a collection agency

Doing any or all of these things will help you to get paid more of the money that is owed to you, and cause you less stress. Remember that while the economy is struggling, so are your customers, many who have never had a problem paying their bills before. Make sure to identify which customers have always paid on time and are now having a problem and those that have been late payers and might be trying to milk the system.

Be flexible but don’t let yourself get taken advantage of, remember to be firm unless you like working for free.

Learn more about jobs that are recession proof, industries such as food, energy, vices (tobacco), entertainment, medical services, debt collection, security or alarm services.

Are any of these things something you could implement into your job or use as a part time job avenue?

The one thing I tell business owners to do to protect themselves and their business in these tough times, if they don’t do anything else, is to have customers fill out a credit application.

While this is important and can make or break you in the long run, if your credit application isn’t asking the right questions, it may not do you any good.

Take some time and update your resume now, just in case. Then if you need it, it will be ready.

As the economy worsens, more and more people look at their bills each month and have to decide which ones to pay and what can wait.

When you are making that decision make sure you are aware of how not paying your utility bills can affect you.

In my opinion, you should always pay your rent or mortgage first, so you have a place to stay.  Utilities would be second and food third.

What are your priorities?

I am reading more and more stories in the news about how bill collectors are really feeling the squeeze of this economy and credit crisis.  Contrary to popular belief, debt collectors are having as hard a time as anyone else, because even though more accounts may be past due, the debtors just don’t have any money, many don’t have jobs and many no longer own a home.

What are you seeing?

If you don’t have to sell your home or any property, don’t.

You won’t get top dollar and will end up losing money. If you can, work on the home or property that you want to sell so when the recession ends you can get more money for it, for example, paint the house, do some landscaping, whatever you can afford or do yourself to improve the quality of the property.

In Indianapolis they are reporting that the broken economy has business booming for repossession companies, but they are surprised to learn that debt collection agencies are hitting hard times.

Turn your hobby into a part time business: for example selling items on ebay.

Specialize in something: Make yourself valuable, employers are more likely to keep an employee who can do more than one thing.