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- Ten Tips on Deduction Management
- Ten Tips on Customer Financial Statement Analysis
- Ten Tips on Limiting Bad Debt Losses
- Ten Tips Relating to Chapter 7 Bankruptcies
- Ten Tips on Communicating with Your Manager
- Ten Tips on Handling Angry Customers
- Ten Tips on Increasing your Visibility at Work
- Ten Tips on Prioritizing Work in the Credit Department
- Measuring Job Performance - Ten Tips
- Ten Tips on Customer Financial Statement Analysis
- Ten Creative Collection Tips
- Ten Creative Problem Solving Tips
- Tips on Extending Credit to Newly Formed Companies
- Ten Collection Do's and Don'ts
- Tips on Choosing a Third Party Collection Agency
- Ten Ways to Find Customer Financial Statements Online
- Ten Tips Relating to the Use of a Personal Guaranty
- Asserting the Ordinary Course of Business Defense to a Bankruptcy Preference Demand; Ten Tips
- Ten Tips on Filing a Proof of Claim
- Ten Tips on Professional Accreditation through NACM
- Ten Things Not to Say to a Customer
- Ten Tips About the Discharge of Debts in a Chapter 7 Liquidation Bankruptcy
- Ten Tips on Hiring and Training New Collectors
- Ten Tips on Building a Better Credit Application
- Ten Tips on Managing Change in Credit
- Ten Tips on Automating the Cash Application Process
- Making Effective Proposals
- Justifying the Cost of Collection Management Software
- Tips on Reducing Credit Risk
- Tips for Handling Unearned Discounts
- Ten Tips about Online Credit Training Programs
- Ten Tips on More Effectively Interacting with Customers
- Comments about Risk Management
- Ten Comments on the Roles and Responsibilities of the Credit Department
- The Roles and Goals of External Auditors
- Ten Key Performance Metrics for the Credit and Collection Department
- Tips on Stress Management in the Credit Department
- Ten Benefits of Online Training
- Ten Tips on Networking Online with other Credit Professionals
- Ten Tips When a Customer Closes its Doors
- Ten Ways Credit Managers get Fired
- Ten Key Financial Ratios
- Tips for Handling Difficult Discussions with Credit Team Members
- Ten Things Not to Say to Debtors
- Ten Tips on Attending Meetings
- Ten Tips on Effective Meeting Follow up and Documentation
- Ten More Meeting Tips
- Ten Tips on International Interactions with Customers
- Effective Teams, Ten Tips
- Tips on Creating Better Emails
- Generating Effective Credit Correspondence
- Exporting
- Accounting
Ten Tips When a Customer Closes its Doors
- Immediately review your file. Update it if necessary. Notify the salesperson – don’t just assume they know, along with your manager.
- Stop shipments in transit with approval from your attorney.
- If your file contains any form of guaranty, notify the guarantor and demand payment in full of the entire balance – perhaps with the assistance of your attorney.
- Work with your attorney to determine whether any recent shipments made to the debtor can be reclaimed either under the UCC reclamation rules, or reclamation under the U.S. Bankruptcy Code.
- If you can file a reclamation demand, do so as quickly as possible.
- Immediately ask for the involvement of the salesperson assigned to the account. Why? Because in this situation, the salesperson and the credit department each have something to lose and something to gain making it more likely that sales will cooperate by quickly contacting the debtor.
- Arrange for the debtor to contact you. At this early stage, you are in the information gathering phase and need answers to a variety of questions, including these:
- What prompted you to close your doors?
- Are you planning to re-open and if so when?
- Have you issued payment to clear our past due balance?
- If not, can you do so today? If not, when is payment scheduled to be made to us?
- If there are no payments scheduled, have you filed for bankruptcy protection?
- If not, are you planning to do so?
- If so, what type of bankruptcy filing? (Example: Chapter 11 or Chapter 7)
- What else can you tell me about this situation that would be helpful for me to know?
- I recommend sending the debtor an account statement as well as a copy of every outstanding invoice.
- I would encourage you to order proofs of delivery on every outstanding invoice. You want to get this supporting documentation before the window for requesting this documentation closes.
- Review your records to determine if you sell to related companies, and if you sell to related companies take whatever steps are appropriate to protect your company.
© 2010. Michael C. Dennis. All Rights Reserved