Meadow Outdoor’s Chris Zukin, Cimmie Schultz and Rachel Anderson gave an outstanding talk on credit and collections at last week’s IBO conference.  Last week we ran Cimmie Schultz’s comments on vetting customers.  Today we excerpt comments by Rachel Anderson and Chris Zukin on collecting difficult accounts.

Rachel Anderson on Collecting Accounts

We can love our customers and still collect.  We regularly review our accounts receivable with our management team and go through every customer with a past-due balance. From those meetings, we leave with a clear list — and that’s when the collection process begins.

I always start with the assumption that maybe the customer simply missed the invoice, or that payment is on the way. So, I send a friendly reminder email. In 80 to 90% of cases, customers respond quickly and make payment.

If there’s no response, I follow up again — first with another email, copying a manager or an Owner, and then with a phone call. At this point, I’m looking for action and a firm commitment to payment. We can take payment right over the phone, which makes it easier for customers to resolve things on the spot. We also offer ACH and E-Check payments, and we have a customer portal as well. These follow-ups also give us a chance to have honest conversations with customers about any financial challenges they may be facing.

Chris Zukin on Payment plans

We can work out plans, but we need communication.  We will work with our customers…years ago I had a small bookstore that got behind.  They owed us $350.00.  I said can you afford $50.00 a month.   No.  I said how about $25.00 a month.  No. So how about a dollar a month?  So I took a dollar a month for two years and that client eventually raised the money to pay us off.

We’re always willing to work out a payment plan — but communication is key. We’re here to work with our customers, not against them. 

Getting sales reps involved.

If a customer goes dark on us, our next step is to bring in the sales reps. This is because at Meadow Outdoor our sales reps are paid on commission, at the beginning of the contract. If we have to file a lawsuit against that customer for nonpayment, the sales rep must pay back the entirety of the commission for that contract. So, they have a strong incentive to help us collect — and they’re usually very effective.

Unlike us, they can stop by the customer’s location, walk through the shop, and speak directly with people we may not have access to. They often have different contacts and relationships that can open doors and get things moving.

Litigation

We handle between 600 and 700 contracts a year — and out of those, we might only file 2 or 3 lawsuits annually. That’s because we stay proactive.

Billboards are a perishable product — once a month passes, you can’t get it back. That’s why it’s critical to stay on top of collections. Keep the lines of communication open with your customers and stay connected with your team. Staying ahead prevents problems down the road.

Zukin, Schultz and Anderson on what they’ve learned about credit and collections.

• Prevention is key. The more we know about a client upfront, the better positioned we’ll be in the long run. Take the time to verify their business information with the Secretary of State, contact their vendors, and pull a business credit report. Reviewing their credit history early on helps us identify potential risks — and ultimately keeps bad payors off our books.
• We’ve all heard the classic line: “The check is in the mail.” But is it really? By being diligent on the front end and setting clear expectations from the start, we put ourselves in a much stronger position — one where the check actually is in the mail..
• The squeaky wheel gets the grease. Your customers are always going to pay their light bill and their water bill — the essentials. As a billboard company, we may not be at the top of that list, so sometimes we have to be the squeaky wheel to get paid. Persistent, professional follow-up makes a difference.
• Review receivables with your team. I strongly encourage this practice — it’s a valuable opportunity to collaborate with your sales managers, gain insights into your customers, and identify any signs of financial hardship early on. The more you know, the better you can manage risk and support your clients.

In the billboard business, everything happens up front — we build the billboard, print the vinyl, install it, and then send the invoice. At that point, we’ve already done the work and incurred the expenses. Now, we need to get paid.

That’s why having a solid credit process in place from the beginning is so important. It helps protect the investment we’ve already made and increases the likelihood of getting paid on time.

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