Francine Rope-Mundy, FRM Commercial A/R Solutions (USA)

I know… this is a design blog, not a financial one… but a trend I’ve seen among designers is that you have those who have stuck gold and others who are just getting by… in both cases, financial literacy is a must – hence, this interview. Here are some key takeaways from this interview:

• Sometimes all the planning in the world cannot keep you from having future troubles.
• Customers can hear you smile over the phone.
• Keep the lines of communication open with customers… in both the good and especially the worse of times.

Francine can be reached at [email protected] or by calling 954-305-6207 (Florida).

What are some of the “easy wins” somebody can do during their lifetime to make sure they don’t run into financial ruin later in life?

Plan ahead but “LIFE” happens. I do not think there are any easy wins but here are a few suggestions. If at all possible buy a house early on instead of throwing money away on rent. If you must move, wait until you can make a decent profit and save some of those earnings. Do not ever rob Peter to pay Paul; this is always a trouble promoting move. Roll with the punches as far as divorce, medical bills and credit card debt. If you experience these, do the best you can to survive by changing the way you live to make up for the losses. Sometimes all the planning in the world cannot keep you from having future troubles.

You’ve had a lot of success collecting on accounts of all sizes. If you have a customer who is late in paying, how do you go about bringing it up and collecting without ruining the business relationship? I’ve been in this situation myself and it was a substantial amount of money, there was no “nice” way to solve the issue and it cost me a great friend and I still didn’t get the money in the end.

It is extremely important to form a bond of trust and don’t do business with friends. Payment plans are a great way to go. This way you get paid some and they do not have to feel the squeeze of paying all at once. I have never lost respect from a customer when I work with the person by never acting like they are bad. They may be in a bad situation but they certainly did not get up that morning and say, “I am not going to pay you today because I don’t want to”. Also smile at all times, they can hear it over the phone.

How do you go about assessing, as a business not a bank, the credit worthiness of a potential supplier or customer who has made a significant order? How do you ensure you are the “first to be paid” instead of the last when said company does get some cash flow?

First, I utilize DNB (Dunn & Bradstreet), personal credit checks (when available) and trade references. Also, a personal visit or conversation with the customer can give me a solid gut feeling only because I have been doing this for so long. Equally important are Lien Laws in place for the protection of all parties. They vary by state but are highly effective. A notice must be sent out to all parties involved in the job and you should NOT pay anyone (or get paid) without making sure a waiver (release of lien) is signed. Again, these actions vary from state to state and I have become well versed in multi-state requirements. UCC filings are another good option. Here is a link to answer some of your questions http://www.floridaucc.com/uccweb/faq.aspx. There are joint check agreements, letters of credit and promissory notes to also assist.

When and by what metrics do you decide to write-off an invoice? I know in my case, I found it easier to just write stuff off rather than go to court against customers who have no money.

If I have exhausted all possible methods of collection and know the customer is out of business and unable to pay, I would write off the $’s at that point. However, you want to continue efforts and be on the look-out, that principle will usually resurface with a new company name or will partner up with someone else to be born again. At this point a call to see if you can recoup some of the money you wrote off is appropriate, they need you if they have started a new venture.

Are there some dead give-aways that a potential client is going to be a deadbeat once you send them an invoice for services rendered or product delivered? What are some trends you’ve seen through the years that would raise red flags for you?

The biggest one is communication. I tell all my customers up front no matter what, they need to keep the lines of communication wide open. If they are unable to correspond then have someone else do it for them. I have seen severe situations of car accidents etc. but if you are a business owner, you must have someone else lined up to step in during emergencies.

I have cultivated relationships where my customer knows they can share anything with me. Any contact at all is showing they care and are working toward settling the balance due. I even had a customer tell me once (actually she was A/P) that they were out of money for toner and could not receive a fax I had sent – red flag, no money for me!!

I know for my business CNCKing.com, customers who ask for “free” samples aren’t real customers and I don’t give them anything… if they don’t have money now, they won’t have it later is my way of thinking. I was wondering what are the thresholds you advise companies where a deposit should be requested and what kind of payment terms have you found increase the success of being paid in full?

I have never worked in an industry where customers asked for free samples. In my manufacturing and distribution experience I have requested 50% down but mostly in situations where the product they are ordering is custom work. It depends too on the financial stability of the customer; if this is company policy across the board and can you recoup any money if they cancel the order (a cancellation or restocking fee is also appropriate).

Anything else you’d like to add?

I want to thank you Jon for this opportunity. If anyone has any further questions or comments, I can be reached at [email protected] or 954-305-6207. I am passionate about what I do and really enjoy the satisfaction of getting employers paid as well as keeping that relationship with the customer trusting to insure future business.

I earned a Bachelor of Arts degree from Michigan State University and have been excelling in credit and collections for more than 25 years. I can offer my qualifications to fit in with any of your accounts receivable needs. I charge a flat start-up fee of $125 and then a charge of 15% on whatever I collect. I am available in my home office or at your facility. My LinkedIn profile shows the full impact I have made in the credit and collections industry.

My accomplishments include 15 years of credit management experience with measurable achievements in reducing DSO, proficient in Lien Law knowledge, enriching sales and setting credit limits. I have developed notable working relationships with customers, branch managers, outside and inside sales personnel and all other departments to improve collections and increase sales.

I can make a positive contribution to your business and look forward to discussing my proficiency in more detail and am available for a personal (or phone) consultation.
If you can also send me a picture of yourself to include in the blog and a website address, that would be great!