How To Write Commercial Collections Letters

Writen by Steve Austin

It is sometimes valuable to bring the sales manager into this step of the collection process. Information concerning the delinquency can often be obtained from the sales department. Tips for Commercial Collection Letters: When writing commercial collection letters, these points should be considered:

Include all basic information.

The commercial collections letter should state how and when you expect payment. It should suggest why the account should be paid in full. It should motivate the debtor to actually do this—now.

Use an effective style of writing.

Most commercial collections letters are written to appeal to the writer and not necessarily to the delinquent customer. Appeal to the debtor.

Use the "you" approach.

Too many commercial collection letters emphasize "we." Avoid such phrases as "we insist," "we remind" and "we want." It is much better to put the customer into the letter, saying such things as "you will appreciate" and "it is to your advantage." Remember that the debtor is not interested in your best interest, but in their own.

Don't say, "We will not write again."

This assures the debtor of their success in evading payment, and a phrase such as "to keep your good credit rating" may be impractical in a situation that has reached a certain stage of commercial collection.

Use motivating factors.

If a customer has not paid, there is a reason for it. Although a letter cannot discover the reason, it can give the customer a way in which they will benefit. For example, by paying now, they may continue to enjoy "open account" terms, or your credit rating won't be damaged.

Appeal to pride, honesty and security.

As a last resort, appeal to anxiety. These are factors that can be used to bring prompt payments.

Address the letter to an individual.

Direct it to the person who is authorized to initiate payments. Keep the letter short. Be as brief as possible, and cover only the most important points.

Get free information and advice on commercial collections.

The Importance Of Inventory Control In Accounting

Writen by John Cantrell

When you create products in your accounting software you should almost certainly be able to enter the cost, if so make the effort.

Without the cost your accounting software's financial statements will only show a fraction of the story.

The cost that you enter should, in most cases, be as close as possible to the average cost of that item that you have in stock. For example -

What is average stock? Let's assume that you have 1 bolt in stock and it cost you $1.00. You then go out and buy another bolt for stock and the cost has shot up to $2.00. You now have 2 items in stock that cost a total of $3.00. Therefore your average cost is $1.50 per item. When you sell one of these items the software will take into account that the cost of that sale was $1.50. Most accounting software systems will adopt this approach

There is a separate section towards the end that looks at the different types of product cost and what they mean.

Another important issue when setting up your products in your accounting software is closely related to whether there are re-order reports in your accounting software and a Purchase Order module that is linked to the re-order system, and you intend using either or both.

This issue basically deals with the ideal maximum and minimum stock that you wish to keep of a particular product. It can be done several ways but the most common would be -

Maximum and Minimum. Let's say you want a maximum number of the item in stock at any time of 20 and a minimum quantity of 10. When the stock level falls to 10 or below the system will tell you to order whatever quantity that takes it back to 20. The minimum level is also known as the re-order point.

In a similar situation your accounting software may only work to a maximum stock level in which case whenever your stock level falls below 20 it will show an order quantity to take it back to 20. "Your system may allow you to enter different levels based on seasons. For example if it gave you four separate seasons then you would need to give it four different levels. This method is more common in industries where there can be large fluctuations in sales depending on season as in summer and winter, as in Christmas and non Christmas periods etc.

If you operate in a country where you charge GST or similar and later claim this tax back then the cost of the product should be shown excluding the tax.

For example a bolt costs $5.00 plus $0.50 GST then show it as $5.00. This example applies to Australia If you are not sure about your own situation then check with your accountant.

Products Module - Additional Uses

You will have already set up your products in your accounting software before you started invoicing so that part should already be done except maybe for some fine tuning that you need along the way.

To reap the full benefits of a products module you will need to record into your accounting software your stock as you receive it.

One of the more important aspects of the products module though in any accounting software is that it keeps a track of your stock.

Many business people that I have met over the years have seen this as being of not much value to their overall day to day operation.

Before you arrive at this conclusion consider some of the possible benefits of keeping a stock control system from the following

Reflecting and recording the true value of stock and the cost of your sales can directly impact on your profit and, or, loss and, therefore, the amount of tax you pay at the end of the year.

You have various reports on hand in your accounting software to show what stock is running low, therefore you can re-order from your suppliers before you run out and possibly lose sales.

Stock control in your accounting software should show you which are your faster moving items and therefore where your money in stock should be more heavily invested.

Stock sales reports in your accounting software should tell you when you last sold a product therefore have you got stock (and maybe lots of that product) that is taking up valuable storage space which could be used for better selling items, or tying up valuable cash in slow moving items.

Is stock mysteriously disappearing? Is someone helping themselves without your knowledge.

Is product running passed its effective use by date or shelf life.

Are some of your products seasonal so are you stocking the right quantities for the peaks and reducing stock for the off seasons.

Is some of your stock shop soiled and not really in a condition to portray your business image.

Many accounting software packages will create re-order reports for you of what the system thinks you may need without you going out there and physically counting. By all means check the suggested order but let the accounting software take some of the grind out for you.

Some businesses can have an enormous amount of capital tied up in stock and it is important to make sure that this capital has been invested wisely. Could some of this value be liquidated to pay off some debt or to invest in new equipment and so on.

Look at what you have and, if necessary talk to your accountant.

I have been involved in all aspects of the accounting software industry for over 20 years. I run several websites that specialize in various subjects including http://www.diyaccounts.com.au that gives advice on all aspects of accounting software from choosing, setting up and using it. Amongst other sites that I run are http://www.sense-now.com that helps newbies understand what internet business will probably work for them and what won't. http://www.oumas.com.au is all about arts, crafts, hobbies, wine and beer making and much more.

Business Management Managing Bureaucrats In Washington Dc

Writen by Lance Winslow

About the most challenging organization to manage would be a bureaucracy in Washington, DC and it is amazing how many people attempt to do this only to fail miserably. It is truly amazing in fact how many people learn corporate business management and then come to Washington, DC to find out how screwed up that is and how unbelievable the blob of bureaucracy is and how deep it actually goes.

For those involved in corporate management and academia who attempt to teach MBA students how to run for profit organizations they need to realize that the bureaucracy in Washington, DC and the organizational format in which it operates is truly out of control.

It takes a lot of patience to manage the bureaucracy in Washington, DC and it is not the kind of ship that can be turned around on a dime either. Many people will blame the president of the United States or the presidential administration for the inefficiencies of the government in Washington, DC however this has been going along for decades prior to them coming into power.

It is not fair to blame the presidential administration for the inefficiencies of government and there is little or nothing and executive branch can do to turn around such a large ship in only four years. Not to mention the huge amount of self-interests that are involved in the government agencies. Managing the deadbeat bureaucrats in Washington, DC is no easy endeavor.

We should have academic management training for government bureaucracies, which work to streamline and make your government more efficient. Unfortunately academia can even keep corporations running smoothly and efficient so it is a wonder if they will ever be able to streamline our government or trained humans to run it efficiently.

I'm sorry if this article is too cynical for you; but since it is the truth it must stand and if you disagree with me you need to get a life and get real. The bureaucracy in Washington, DC is a friggin joke. Consider that in 2006.

Lance Winslow

Innovation Management Forced Into It

Writen by Kal Bishop

Creativity can be defined as problem identification and idea generation whilst innovation can be defined as idea selection, development and commercialisation.

There are distinct processes that enhance problem identification and idea generation and, similarly, distinct processes that enhance idea selection, development and commercialisation. Whilst there is no sure fire route to commercial success, these processes improve the probability that good ideas will be generated and selected and that investment in developing and commercialising those ideas will not be wasted.

Whilst there is a lot of lip service given to innovation, the reality is that it often results from competitors making significant gains – competitors who themselves have had to be innovative to challenge existing market leaders. Good examples are i) New Coke, forced into action when it lost market share to Pepsi and ii) IBM forced to change as a result of Microsoft.

An irony is that once innovative companies become less so when they have found their Golden Fleece. Finding a killer product forces a firm to concentrate on marketing and improving that product and results in a degree of parochialism and path dependency. Again, a good example is Microsoft – after Windows 95, innovation has been less significant; growth has resulted less from innovation and more from buying up innovative companies.

These topics are covered in depth in the MBA dissertation on Managing Creativity & Innovation, which can be purchased (along with a Creativity and Innovation DIY Audit, Good Idea Generator Software and Power Point Presentation) from http://www.managing-creativity.com.

You can also receive a regular, free newsletter by entering your email address at this site.

Kal Bishop, MBA

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You are free to reproduce this article as long as no changes are made and the author's name and site URL are retained.

Kal Bishop is a management consultant based in London, UK. He has consulted in the visual media and software industries and for clients such as Toshiba and Transport for London. He has led Improv, creativity and innovation workshops, exhibited artwork in San Francisco, Los Angeles and London and written a number of screenplays. He is a passionate traveller. He can be reached on http://www.managing-creativity.com.

Managing People For Performance

Writen by Graham Yemm

"People improve productivity, not organisations."

Managers who have had any form of training will be familiar with the idea of setting goals or objectives, and probably with the principles of appraising performance. With this in mind, why is it so many managers keep asking about how to motivate their staff or how to get more from them?

This whole area is a key differentiator of good managers and is a large part of what managers are being paid for! In this article I want to offer some ideas to help you become better at getting the performance you want from your teams. I will suggest some of the reasons why you, and other managers, perhaps do not do it very well and what the benefits will be when you begin to apply the principles.

Let us begin by stating the obvious – in order to manage people for performance you need to clearly establish what good performance is for each person and role. Too many managers think that this means just setting the goals. Not so, as you cannot manage those. Defining good performance can include what the outputs and results are – and how they are being achieved. That is the part you can manage. Recognise that managing for performance is an ongoing process and not an occasional intervention or snapshot.

Why it is not done well.

People do not understand what is needed to manage performance!

Managers assume people will work towards their objectives.

Too many managers think that money is all that motivates people to do what they need to.

Managers are too busy spending their time on the wrong priorities to manage for performance.

Organisations think that because they have an annual appraisal process that they are managing performance.

If you rely on an annual appraisal (or review) as a mechanism for setting objectives and reviewing how people have performed, what problems does this encourage? Are the objectives meaningful? Do they stay in the forefront of peoples' minds? Do they stay relevant throughout the year? How are they monitored throughout the year? When you come to reviewing them, how valuable is the conversation?

What to do.

Firstly, everyone should have clearly defined standards of performance and/or key performance indicators (kpi's). These are same for all those doing similar roles and provide a baseline for performance. There are two types of these – the quantitative and the qualitative. The former are more straightforward to do as they will involve numbers, eg. number of calls handled per day, time to respond to queries etc. The latter are more challenging because they require some thought in order to clearly define the standard in a behavioural way which removes most of the subjectivity. This can refer to quality of work, appearance of someone's workplace, answering the phone or following corporate standards etc. When people are working to these kpi's they should be in a position to deliver the performance you want.

Although these kpi's need to be clearly outlined and understood by all involved, the key to managing for performance is to follow the Pareto principle and identify which 20% are the ones which contribute to 80% of the outcomes. These are the things you need to manage. You want to be able to monitor them, to revisit them and raise the standard in order to get even higher performance.

The other thing people need to have a clear goals or objectives. These should be clearly stated, maybe following the SMART principle. (Specific, Measurable, Achievable, Realistic and Time bounded.) The measure can be either numeric or behavioural, which means clear definitions. Goals help in many ways, especially as they link to many of the models of motivation and the fact that a sense of achievement is a powerful buzz for most of us.

When setting goals for people in the workplace, especially if you want to manage performance, think about the timescales you aim for. Giving people 3 or 5 goals at an appraisal with a long timescale will not necessarily provide much drive or motivation. To make them meaningful consider setting several goals with different time deadlines, mainly short and medium term. When they are completed set more – and the process becomes more dynamic. It also enables you to reflect any changes in the business and ensure the relevance of the goals.

How to do it.

Make sure you think of this as a key priority – so give it time! Make sure that the kpi's are clearly stated, written down and everyone has a copy.

When you set the goals with your team members and they have agreed, get them to develop an action plan for how they will achieve each one. Have them do it, and give you a copy within 48 hours of setting the goals. A simple way of doing this can be to use a simple diagram such as a stairway - and we can happily send you a sample.

Ask them to identify the key steps to take in order to move from "now" to the goal. Between you, agree the timescales for the key stages and also discuss any help required and possible problems. Once this is all agreed and finalised, you will have a copy and the team member has theirs. Now is the first key action for you – put those dates in your diary to make sure that you will sit with the team member and review their progress. This is an "A" priority activity and should not be moved!!

As your team members work through their action plans and you have your regular reviews, you will be monitoring their progress in a timely and effective manner. These reviews are almost mini-appraisals and by carrying them out at the agreed times you will make life easier for all concerned when you have the annual appraisal, because it will be a consolidation of these meetings.

During these reviews ask for what needs to be improved, what has gone well and what is going to happen next. Talk about the kpi's which are relevant to their plan and make sure they are meeting these. This monitors and manages for performance. Provide feedback (on performance or behaviour, not personality) whether you have to criticise or reprimand or you can praise. By having these regular reviews, you can avoid the management fault of not telling people how they are doing!!

When the goal is achieved, carry on and set the next goal, get the action plans – and continue as before. Not only are you managing performance, you are helping your team to feel more involved, more successful and more motivated. Remember, people just want to know what is expected of them, be given the support to do it and then told how they are doing. What it requires from you is to make time to have the regular meetings with your team, after all they are the ones who provide the performance you need. Give them your time and they will give you the performance.

Graham Yemm is a consultant with 20 years of experience. He runs a Solutions 4 Training Ltd, a UK based consultancy and works internationally. He has worked with many organisations helping them to develop their processes and their managers to improve performance. He can be contacted at Solutions 4 Training or +44 1483 480656.