Plan of Action – Part 2

Posted on March 29, 2010 by Saldutti

“Creditors have better memories than debtors.” ~ Ben Franklin, Poor Richard’s Almanac

As a business owner, it is inevitable that you will run into overdue debt at some point.  Given the state of our ever-so-slowly recovering economy, businesses are faced with this issue now more than ever before. A large number of customers – both individuals and other companies – are putting off paying their bills due to financial strain, lack of organization or plain old forgetfulness.

It is vital to have a solid plan of action in place to arm your business with the essential tools it needs to thrive in today’s volatile environment.

1 – Contact is Key (see last week’s post)

2 – Excuses, Excuses

When put in an uncomfortable situation, a customer might offer one of many excuses from time to time (see post on March 2, 2010).  Your best defense is to prep a list of responses based on the excuse.  If the customer claims to have never received the invoice, have a copy of it handy so that you dictate the date, amount and invoice number.  If they claim to have not received a shipment/item, have tracking information available.  If the “check is in the mail,” ask for the check number, dollar amount and date mailed.  Should the check arrives for a lesser dollar amount, contact the customer and set up a payment schedule for the remaining balance.

3 – Be Flexible

To better meet the financial needs of your customer, consider offering a wider array of payment options such as credit card, wire transfer or electronic checking transfer from the bank.  If money is a big problem, try to work out a payment plan that both you and your customer find satisfactory. 

4 – Get Tough

If necessary, begin to withhold service from customers who are late on payments.  Whether it means delaying shipments, losing the privilege of after-hours/emergency service or refusing new projects, you will show your customers that you are serious and will not be taken advantage.

5 – Ask for Help

When you have exhausted all attempts, it might be time to consider a specialist.  A legal collections firm offers a significant advantage to debt recovery – combining the effectiveness of a collection agency with the power of the law.

Plan of Action – Part 1

Posted on March 23, 2010 by Saldutti

“No man’s credit is as good as his money.” ~ E.W. Howe, Sinner Sermons

 As a business owner, it is inevitable that you will run into overdue debt at some point.  Given the state of our ever-so-slowly recovering economy, businesses are faced with this issue now more than ever before. A large number of customers – both individuals and other companies – are putting off paying their bills due to financial strain, lack of organization or plain old forgetfulness.

It is vital to have a solid plan of action in place to arm your business with the essential tools it needs to thrive in today’s volatile environment. 

1- Contact is Key

Whether it’s a personal phone call, friendly reminder, a visit to the office or a combination of these, decide what will work best for you as well as your customer.  Is your customer tech-savvy and constantly by a computer?  Try email.  Do you have a cordial relationship with this person?  Opt for a personal phone call.  Is the company within close driving distance?  Swing by for a quick visit.  It is crucial to act swiftly and remain steadfast in your efforts

Utilize Email – When an account is past due, send an electronic invoice in addition to a hard copy.  In any business, time is money – and this delivery method will speed up the process.  In lieu of formally mailed collection letters, opt for email to ensure that your message reaches the intended recipient promptly.  

Get Personal – Simple yet effective, a phone call or visit with a customer may be just the trick to get the ball rolling.  Make sure to tell them how much you value their patronage and support.

Be Persistent – Whether it’s weekly or even daily, timely and constant communication will pay off.  Get an early start – contacting customers within a couple days of an invoice being past due.

Establish Multiple Contacts – By nurturing multiple relationships at a company, you build trust.  This may be an important factor when it comes time for the company to pay its bills.  Additionally, you benefit from having several people to contact should your main liaison not respond. 

To be continued next week …

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Warning Signs of Potential Debt Problems

Posted on March 15, 2010 by Saldutti

Protect yourself and your business by paying attention to these warning signs:

  • Numerous inquiries from other suppliers or financial institutions about one of your accounts
  • Customer asking for clarification or proof of services more frequently
  • Financial downswings, natural disasters, or loss of major employer(s) in the customer’s geographical area
  • General slow downs or loss of business in the customer’s industry

Your sales force plays a key role in detecting possible debt problems – they may notice these warning signs first:

  • Order levels shrinking
  • Empty shelves in the warehouse or retail floor
  • Plant operating at less than capacity
  • Your client’s major customer is in trouble
  • Loss of key staff members
  • Large layoffs or reductions in hours
  • Restricted tours in areas of facility

Additionally, it is important to watch for warning signs of potential bad check problems:

  • Checks with printed numbers under 300
  • No preprinted name or address on the checks
  • Starter checks with no printed information
  • Address on check and ID don’t match
  • No picture ID

Collecting Debt Can Preserve the Life of Your Business

Posted on March 09, 2010 by Saldutti

If your business is owed money and all initial attempts have failed, a legal collection firm is critical in today’s environment.  Rather than utilize your own company’s valuable time, resources and manpower, a legal collection firm is experienced in tracking down debt that is rightfully owed to your business.  The firm will work with a company to develop timelines and strategies to collect debt in a manner that is acceptable to both the business as well as the debtor.

A collection law firm has a significant advantage over a collection agency, offering its clients the ability to take further legal action should a debtor refuse to pay.  While both a law firm and collection agency will use similar techniques at the beginning, a letter or phone call from a lawyer will likely prove to be more intimidating than one from a collection agent.  However if no response or payment is received, a legal collection firm can protect a creditor by promptly proceeding with litigation.  Additionally legal collection firms such as Saldutti, LLC offer its clients the latest in computer technology as well as skip tracing and forensic investigations.

According to Robert Saldutti, it is imperative that a legal collection firm or collection agency adhere to a strict code of ethics and follow the Fair Debt Collection Practices Act.  If you are considering hiring a legal collection agency, Saldutti suggests that you verify that the company is a member of the American Collectors Association or the Commercial Law League of America (  Both organizations exhibit the highest standards of integrity and professionalism to ensure that its members are reputable.

Top 10 Excuses Businesses Use for Not Paying Invoices

Posted on March 02, 2010 by Saldutti

In today’s tight credit environment it is even more important than usual to stay on top of late-paying customers. More and more purchasers are looking for opportunities to extend payment terms, and for some this can mean finding excuses either to pay late or not at all.  Some of the classic or more common excuses for not paying invoices include:

  1. We haven’t received the invoice
  2. Our terms are (30, 60 or 90) days
  3. We don’t have a payment run until next month
  4. There are no check signatories available
  5. The check is in the mail/the invoice has already been paid
  6. The goods were never delivered or the order was cancelled
  7. The goods/services were faulty or not as described
  8. The balance is incorrect and we are awaiting a credit note
  9. The goods have not been sold/the buyer has not paid for the goods yet – need sale proceeds to be able to pay
  10. The debtor is insolvent

Fighting Corporate Identity Fraud

Posted on February 23, 2010 by Saldutti

Financial crimes are one of the fastest growing areas of criminal activity in the United States.  Recently, Saldutti, LLC sued a New Jersey-based business on behalf of one of the world’s largest banks.  After a thorough investigation, the firm found that the company, accused of a fraudulent business loan, had filed Chapter 7 bankruptcy. The firm’s forensic evidence also revealed that the company’s president was in fact a “straw person” and proceeded to file a lawsuit against the real party who had set up the conspiracy to defraud the bank. After an intense two days of testimony, the court ruled in favor of Saldutti’s bank client.

Unfortunately, these types of case are becoming more and more frequent.  Here are a few quick tips on Fighting Corporate Identity Fraud:

  • Ask for photo ID – While lawyers continually ask for photo identification of individuals who sign documents in personal transactions, there is no reason why this standard should not extend to transactions involving individuals who sign for corporations.
  • Ensure that the party signing for the corporation is an authorized signing officer
  • Obtain an updated status certificate and corporate profile

10 Tips for Collecting Money in Today’s Economy

Posted on February 16, 2010 by Saldutti

Most companies have witnessed firsthand the signs of a sluggish economy. Credit and collections managers will quickly take notice of slowing, late or negligent customer payments.  Late payment can result in debt recovery problems. Smaller companies, in particular, are continuously struggling to find ways to come up with enough cash to stay alive.

Businesses are dependent on their cash flows but are faced with the dilemma – how to collect money quickly without alienating the company’s lifeline – their customers?

1. Have a clearly-defined credit policy in place. Review it with each customer – both new and longstanding – and draw attention to the key points.

2. Don’t ignore overdue bills – remember that the longer a bill goes past due, the less collectible it becomes. Plan action as soon as it runs 30 days.

3. Re-bill promptly, as soon as the first bill is due. Feel free to request payment in full within 15 days rather than the traditional 30.

4. Pick up the phone and call once a bill is overdue more than a month. A phone call is 10 times more effective than a letter. While this can be awkward for some business owners, it is simple and quite effective.

5. Never apologize when you call or write – remember that this is money that is owed to you. Simply ask the customer to write a check today for the full amount owed.

6. Keep the tone friendly and sincere. There is no reason to be confrontational – even if the customer becomes hostile. Listen to what the customer is saying and be sympathetic. Your customer may also be having trouble collecting money from his or her customers.

7. Don’t be vague – always ask for the full amount not just a payment. If the customer can’t comply, insist on an exact amount, a check number, and the exact date when you can expect the partial payment.

8. Never negotiate the amount, just the terms. If your customer will have a problem paying, offer a payment plan as a last resort. Insist that the first payment go in the mail today and be very clear when you expect to receive the entire amount.

9. Take them to small claims if you keep feel as if you’re being strung along. In 30% of cases, debtors pay up before they go to court.

10. Get the law firm advantage to debt recovery. When you have exhausted all attempts, it is time to hire a specialist. A legal collection firm offers significant advantages to debt recovery – combining the effectiveness of a collection agency with the power of the law. When you employ the services of a dedicated collection law firm, you send a very clear message to your clients – you mean business. The law firm advantage is critical in today’s environment.

The Fair Debt Collection Practices Act

Posted on February 10, 2010 by Saldutti

Due to the current economic climate, more accounts are in collections than ever before. Debt collectors have a steady supply of work and have experienced record growth within their industry. In light of this, more media attention is being focused on the unruly and often abusive tactics some collect ion agencies employ to acquire a payment.

Here is what your business needs to know:

Enacted in 1978, the Fair Debt Collection Practices Act is a compilation of sensible laws created to compel collection representatives to act in a professional manner. The Act creates guidelines under which debt collectors may conduct business, defines rights of consumers, and prescribes penalties and remedies for violations of the Act. While the FDCPA has significantly reduced the problems associated with harassing debt collectors, it has ultimately proven beneficial to creditors and collectors as well.

Those in the business of extending credit have the reasonable expectation of being paid back. When a lender does not receive timely payments, they are fully within their rights to seek and expect payment.  At this point, a business may opt to bring a collection agency or creditor law firm on board. While their goal is to obtain the payments due their clients, these collection specialists will also serve as a direct reflection of the company they represent. It is crucial to employ a professional creditor and collections firm that will uphold your business reputation while following the lengthy and often complex guidelines of the Fair Debt Collection Practices Act.

Just one of the many advantages of Saldutti, LLC, the firm is an active member of the Commercial Law League of America (CLLA) – Creditor Rights Division and the National Association of Retail Collection Attorneys (NARCA). Both organizations exhibit the highest standards of integrity to ensure that its members are reputable. As a professional and courteous collection law firm, our staff is well-versed and trained in FDCPA issues.

The Fair Debt Collection Practices Act is listed in its entirety on the Federal Trade Commission web site.  To review the full list of prohibited and required conduct, go to

Protect Your Business From Fraud

Posted on February 03, 2010 by Saldutti

Given the current economic climate, Saldutti Law has seen an increase in fraud cases and urges business owners to be on the alert. One of the biggest indicators of a fraudulent company is an international shipping address. Romania, Pakistan, Russia, Lithuania, Egypt, Nigeria, Colombia, Malaysia, and Indonesia have a very high incidence of fraud, and often have unverifiable addresses.

Additional indicators include untraceable email addresses, bogus web sites and non-existence web presence. Businesses should also be wary of particularly large orders or orders of expensive items as well as different shipping and billing addresses.

According to Robert L. Saldutti, Esq., businesses can take a few extra steps to protect themselves against fraud and future credit problems:

1. Insist on Credit Applications – Credit applications are the lynchpin – recording contact information for the customer, personal references and business references, like banks or employers. It is crucial that a Creditor Rights Attorney draft and/or review the credit application to guarantee that the document is viable.

2. Update Credit Agreements – The document should clearly outline the terms and conditions of a contract. For the agreement to be legal and binding, the document needs to be signed by both parties. Credit agreements that are detailed and thorough leave little room for customer discrepancy.

3. Don’t Rely Solely on Dun & Bradstreet Reports – D&B maintains a database of more than 100 million businesses worldwide and is a leading provider of business information for credit and purchasing decisions. While the service can be a useful resource, providing essential data such as payment history and risk assessment for a specific company, D&B reports are not completely up-to-date and can be missing vital current information.

4. Set up Google Alerts for Your Clients – A Google Alert is an effective, simple, and best of all, free tool to learn more about your customers. Any time a designated company is indexed in Google – whether a newspaper article, a web site, a subpoena, or blog – an alert will be sent to your inbox. This is a great way to monitor a business’ online reputation.

The Importance of a Solid Credit Policy

Posted on January 26, 2010 by Saldutti

There has never been a better time for a business to review and update its current credit policy. The potential impact of not having a well-documented and strictly followed credit policy can quickly compound during recessive economic times. It is a proven fact that companies who do not adhere to their credit policies show a significantly higher level of bad debt write-offs.

It is crucial to tighten up your credit policy and implement it effectively. This detailed and concise document should outline the procedures and actions that will take place should a problem arise and a customer fail to pay. A credit policy should be well thought out, thorough and easily understood by all parties.

 The task of creating or revising your company’s credit policy should not be taken lightly. It is in the best interest of your business to have a credit professional or legal collection firm evaluate your policy for any loopholes or language that could be misconstrued. It’s also beneficial to involve both your credit personnel and sales team in the process. This collaborative effort will give both groups an opportunity to voice concerns and will ensure that all parties are familiar with the policy.

A solid credit policy will encourage cash flow, protect your bottom line and better prepare your business for these unstable economic times.

While collection agencies may be all bark, our law firm will take a bite ….