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Third-Party Receivable Management

Third-party receivable management is the use of another person or company to contact your past-due customers and arrange for payment on your behalf.

Most credit policies suggest that 90 days or more past due is the tipping point.  Decisive action must be taken to prompt payment.  Remember, if your profit margin is 5% and the customer owes you $10,000.00, should that debt remain unpaid, it will take you $200,000.00 in new sales to get back to zero!

If your customers exhibit any of the following traits, it is time to hire a third-party to protect your asset:

  1. “I’m just in the middle of changing banks (or getting new financing).
  2. Loss of an important customer
  3. Loss of a critical employee or manager
  4. Slow receivables or large bad debt – Domino effect!
  5. Broken promises
  6. Messages not returned
  7. Writ or Statement of Claim from another supplier for goods sold or delivered
  8. Change of ownership, management, death – do something NOW!
  9. “I have no money.”
  10. Mail return
  11. Trade rumors
  12. Bank financing that includes extraordinary security such as assignment of life insurance
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