In the Trenches: Prioritizing Tasks, Getting Paid

I had a rude awakening earlier this week when I stumbled upon our commissions list. Some of our income comes from the commissions we receive from hotels, rental cars, and other services we book for our clients. This list revealed that more than a hundred commissions from last year have yet to be paid. Naturally, I wondered what was going on!

It’s a shame that some people don’t always pay as they should. It’s fairly common to have to pester properties repeatedly to get the money they owe us. That’s why we have an employee who’s tasked with keeping up with delinquent accounts. There’s only one problem: As we’ve grown, he’s become busier and busier, and the number of commissions has increased. Chasing down payments takes a lot of time, and it fell to the bottom of his to-do list. Now here we are with a lot of unpaid commissions, and I have to make a decision about how to tackle the problem.

Clearly, this matter needs immediate attention: We’re leaving money on the table that should be in our pockets. We can’t let the list keep growing. That means I need to either free up time in my employee’s schedule, by shifting his responsibilities or increasing his hours, or make a different move.

What I think may be best is to find someone new — a bounty hunter, if you will. Instead of crowding my current employee’s schedule, it might make more sense to hire someone with a Terminator-like focus on collections. Though I’m still debating the merits of this, I could pay the person a percentage of the commissions collected.

No matter what, I need to resolve this issue quickly, so we don’t leave our money unclaimed.

About Brett Snyder

Brett is the Founder and President of Cranky Concierge air travel assistance. He also writes the consumer air travel blog, The Cranky Flier.
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7 comments
guest3457777754555
guest3457777754555

Have you ever considered using a lawyer to send a collection letter for you?  LegalShield's Small Business Legal Plan provides many benefits.  One of those benefits is that the law firm in your state will send 10 collection letter per month (120 a year) to organizations that owe you money.  The law firms DO NOT take a percentage of what is collected.  Just one of many services that LegalShield offers to its Small Business Customers.

Jim
Jim

Just stop booking your customers at deadbeat hotels.  Book them at hotels that pay on time.

Chris
Chris

I wouldn't go to a pure % model if I were you. Some collections will be pretty easy (sometime just a couple reminders (email first and then snail mail) is more than enough, and paying a commission for just sending an email and waiting a few days is just wasting money !... Many accounting systems will allow for automatic reminders to be issued.

This is also where you'll find that one of your invoices wasn't properly labelled or addressed to the wrong person / entity. Don't outsource that important customer contact !

And then, for the most complicated collections, yes, you'll need a specialist on commission.

DebbieT
DebbieT

Your initial thought to find a "Terminator"-like focus is ideal and kudos for realizing that!  There are huge personality profile differences in people that tend to make good money collectors, and people that make you good money.  <smile>  Customer service people are a totally different breed with a  skillset that differs greatly from Accounting and Collections people.  You're looking for people with the ability to focus, stay determined, pay attention to the laws regarding collections as well as have a deft enough touch to *not* alienate current clients that may be just in a rough patch - or a great client that simply overlooked a payment to you.  Plus, this is another opportunity to bring your business back into their sights, and can turn out to be a potential money-maker as well as a collection point!

thetravelanalyst
thetravelanalyst

First I think it's totally awesome that you view this as a company-wide problem. As someone who works in Bigcorp where a common response is to pin blame on one person, it's admirable that you recognise your employee's schedule is full and take responsibility for solving the problem. (Something I am really committed to as I grow my startup).But I digress.Perhaps divide your list into 2? Those accounts that will be time consuming and difficult to collect and those that will require less effort. There are a number of reasons why things go unpaid. Some people/companies are true shirkers or have fallen on hard financial times and are juggling. Those are the hardest and deserving of a third party collector. Some have simply forgotten, allowed the payment to slip off of their radar. Simple reminder usually remedies the problem.

David Sumner
David Sumner

The perfect time to bring on a third-party collection agency is when you’ve grown large enough to have an issue with unpaid balances but aren’t sure if the problem is pervasive enough to bring on a full time employee.  Adding a position is expensive; you have their compensation, training, benefits and the time it takes to develop your internal procedure to best utilize them and then the time it takes to monitor their performance.  Utilizing a third-party agency like mine assuages many of the costs associated with recovering your outstanding balances.  The other benefit is the ability to locate customers that have changed numbers, closed their business, or moved away.  A small company’s internal collector may be very talented, but without a skip tracing database that agency’s like mine utilize, their efforts will only produce so much, and you’ll leave money on the table.

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  1. [...] In the Trenches: Prioritizing Tasks, Getting Paid – Intuit Small Business Blog We’ve neglected an important part of the business, and that means I need to either reallocate time or find someone new to handle it. [...]

  2. [...] In a Trenches: Prioritizing Tasks, Getting Paid – Intuit Small Business Blog We’ve neglected an critical partial of a business, and that means we need to possibly reallocate time or find someone new to hoop it. [...]