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You may know that AdvancedAR (www.AdvancedARfunding.com) has quietly become the direct lending division of Ftrans over the last several months. Ftrans continues our growth and significantly expands our efforts in this area by creating a distinct funding operation, AdvancedAR, a provider of business lines of credit to small and mid-sized businesses. In conjunction with this launch of AdvancedAR, FNB Bank (www.yourfnbbank.com) joins with us as our new financing partner. Ftrans, with over $6 billion in receivables transactions processed, continues to serve as the operations and transaction processor of Advanced AR.
AdvancedAR provides business lines of credit to SMB owners, supported by enhanced trade credit management and collection capabilities that have been developed by Ftrans over the last eight years. These best-in-class practices and procedures are usually only available to the largest, most sophisticated businesses and help AdvancedAR’s clients collect receivables more quickly and reduce bad debt expense.
“The success that Ftrans has seen over the past few years is a true testament to the value our service provides small businesses,” said Dan Drechsel, CEO of Ftrans. “We believe that the official launch of AdvancedAR, which will now incorporate the direct lending division of Ftrans with FNB as our partner, will allow us to reach more businesses and help them solve their trade credit management and funding challenges.”
“We believe AdvancedAR will significantly enhance our ability to build communities by helping small businesses grow,” explains Alan Gay, Chairman of FNB Bank. “Partnering with Ftrans will allow us to serve existing and new clients with loan products that make use of Ftrans’ unique collateral monitoring and trade credit management capabilities.”
About FNB Bank
For over 111 years, FNB has been dedicated to making the community better by helping people reach their financial goals. Originally organized in 1900 in Scottsboro, Alabama, FNB now serves a three-county area through ten branch office locations. FNB currently provides small business with financing exceeding $137,000,000. FNB’s founders established FNB as an independent hometown bank and FNB continues to pursue that mission today.
A Simple but Costly Mistake
When looking for a business loan it is critical to present a professional appearance to potential lenders. Everyone knows to be organized, thorough and courteous, but many make a common mistake that ensures lenders won’t take them seriously. The fix is inexpensive and simple but if you aren’t aware of the problem it can be a costly mistake.
Many business owners underestimate the need for a custom email address for their company. Often, the first piece of information a lender sees about you and your company is an email address. Your first impression should be that you have taken the time to structure your business communications correctly. Sending business correspondence from a free email service like Gmail, Yahoo, or AOL undermines professional image.
Additionally, creating a simple web site to go along with your domain provides an extra edge of credibility. Savvy lenders, partner companies and consumers will check your site. Having a professional site not only shows that you are a legitimate business, but provides more information about your company. Consider it a low-cost opportunity to present your sales pitch to each visitor to your page. Most companies that sell domain names will also provide hosting, and many will set up a simple page for you.
A custom business domain name and email service is easy to set up. Some solutions cost less than $10 a year. Owning your domain shows lenders that you are running an established and legitimate company, and that you plan to stay that way. Take the time to set up a custom domain for your business emails. Start your conversation with lenders on the right note.
(The following services provide simple, affordable solutions for small to mid-size businesses)
by Sandra Chesnutt
LinkedIn, the most popular social networking site geared towards professionals, has a long-awaited IPO coming soon. Last week, the company filed paperwork with the SEC to officially begin the process of an initial public offering. Currently, LinkedIn is estimated to be worth $2.51 billion, a number that is expected to grow as the company becomes publicly traded.
If social networking isn’t your thing . . . maybe it should be.
Think of LinkedIn as the next step in the evolution of managing business contacts. LinkedIn is to your Outlook contacts, as Outlook was to your Rolodex. Except now, you have access to key introductions that you never knew your personal network had. As a small business owner, you are already strapped for time so adding another thing to your list sounds daunting. Wouldn’t you love to connect with new prospective business partners, customers and employees without having to “meet for coffee” with your entire network to find out who they know? LinkedIn is a resource to find, talk with and influence your industry. As of December 31, 2010, there are over 90 million registered users of LinkedIn. Now that the site has gained traction, it’s time start a free account and reap the benefit.
What can it do for me?
A new business opportunity might be looking – Be findable. Remember the Rolodex –> Outlook –> LinkedIn metaphor? Think of LinkedIn as the world’s biggest Rolodex – and you and your connections are an invitation-only part of it. You personally, your company, me, everyone can be in this giant Rolodex. Some entries are robust and engaging, others are lackluster. Just as a warm introduction gets more traction than a cold call, a thoughtfully prepared LinkedIn profile with a robust group of connections will help you attract the contacts you need.
Keep in mind people are looking at your “Rolodex entry” as a summary of your career and as way to non-intrusively connect with and learn about you, even if they do not have your email address (The LinkedIn message system includes inter-network message sharing). Even when your contact information changes over the years, people can easily find you without your email address and vice versa. Personally, I don’t consider myself prepared for a phone call or meeting until I have done my Linkedin homework. My link: www.linkedin.com/in/sandrachesnutt
Link to the right person for the job. Talented job seekers now actively use the extended LinkedIn network and LinkedIn Jobs module (www.LinkedIn.com/jobs) – at all levels. Searching for new employees through LinkedIn gives the added bonus of allowing you to investigate a candidate’s connections, work experience, and to an extent their character, conveniently displayed within their LinkedIn profile. We have found some of our best hires directly through Linkedin.
Get free PR. As easy as it is for you to use LinkedIn to size up job candidates, you can be sure potential partners, employees, and contacts are sizing up your business. If you are nowhere to be found, what does that say about your business savvy and industry presence? Make it easy for people to get the correct message about you – from you.
Become an Influencer. LinkedIn also gives small businesses the opportunity to engage prospects on the same footing as larger businesses. Forget press releases and outsourced public relations. Participating in and guiding industry-focused discussions on LinkedIn is an affordable and credible way to build your brand.
Begin discussions and give insight that is meaningful to your business. You can impact your client’s, prospect’s and potential employee’s awareness of you. Try searching LinkedIn Groups for discussions related to your business or industry. One caution, don’t seek attention. Being annoying is one way to make an impression and improve stickiness, but certainly not the one you wanted!
Finally, you can’t afford not to participate in LinkedIn. Ignoring LinkedIn reduces your company’s ability to make impressions on your targets. And we all know, out of sight, out of mind.
Recently, I spoke with a professional collections representative, Frances Robinson, to find out the secrets behind effective collections calls. As background, you should know that Frances, who has been in the collections industry for 17 years and has lead our collections team for three years, is well known at AdvancedAR for her kind and gentle spirit. Here are some nuggets of wisdom from our conversation:
Sandra: What is it like to call someone at a business about payment when you know that they are busy and not going to be excited to get your call?
Frances: Regardless of the industry there is a common phrase that is universal in the world of collections, “The check is in the mail.” Unfortunately, in many instances the invoice has not even been scheduled for payment, and this line is simply a way to get the collector off the telephone with a promise to pay.
Sandra: I bet you hear that frequently. And I wouldn’t be surprised if that promise is routinely broken. How do you respond?
Frances: The key to successful collections is to not take the broken promise so personally that it alters your personality, speech, and professionalism on the follow-up call. It is beneficial to maintain a firm but respectful tone during a collection call. This allows you as the person seeking to be paid to take control of the call and to stress the importance of making your company’s debt a priority without insulting the customer.
Sandra: How do you make sure that your phone call gets results?
Frances: As I have heard often, it is easier to draw bees with honey than vinegar. The same is true with collections. When a collector treats a debtor with respect, most of the time your invoice is placed closer to the pile of invoices scheduled to be paid.
Sandra: What philosophy have you developed from over 20 years in professional B2B collections?
Frances: My philosophy has always been to treat people the way I want to be treated. Each call and circumstance is different. A collector may be speaking to a customer experiencing temporary financial problems one month, and enjoying a flourishing business the next month.
Sandra: What’s changed about collections since you first began?
Frances: Although we are living in an electronic era, one factor remains the same in collections, often the check is actually in the mail, and past due invoices will be paid with follow up and a firm, but respectful, collection call.
What are your collections secrets?
Sandra Chesnutt is a Marketing Director with AdvancedAR. She spoke with Frances Robinson, a valued AdvancedAR associate who makes collections calls as part of the AR services provided by AdvancedAR. AdvancedAR combines professional receivables services with fast and affordable access to funding – providing small and medium businesses the cash they need to grow and take advantage of market opportunities.
Small business owners often miss how critical receivables management is to maintaining cash flow and controlling costs.
There are several strategic ways to go about this:
Reducing days sales outstanding (DSO). In my last blog, I talked about how to calculate the valuable DSO number. The most important thing you can do is start measuring your DSO regularly and consistently. Decreasing your DSO can free up more cash than you realize. Increases in your DSO can mean your customers are less satisfied than they were before. UPS, the shipping company, calculates DSO by customer. If they see a downward trend they immediately make a customer service call.
Your AR department is your most important customer service team. They are always dealing with your customers’ money and people are sensitive about money, even in a business situation. Developing the skills within your organization to take the emotion out of the AR process improves customer service. Every aspect of the sales cycle from order to collection is influenced by customer service. Recurring sales are often influenced by customer relationships; your AR department can cost you if it is not professionally monitoring and managing collections and customer relations. More often than not, the small business owners we talk to feel they should make the collections calls themselves. We feel that this is not a best practice – more about that in an upcoming blog.
Carefully reevaluate the assumptions behind your AR to collections policies. You may never make collections calls before 60 days because you assume your customers will be offended if you follow up before then. Would your aging improve if you made calls at 15 days to verify receipt of the invoice? Most non-payment is due to a dispute. The sooner you know about disputes, the more quickly they can be resolved, reducing the negative impact on your cash flow. What other assumptions are keeping you from successfully converting receivables to cash effectively?
Get creative. You know your business better than anyone. What can you do to decrease accounts receivable overhead and processing costs? Can you standardize price lists and proposals? Are you requiring written quotes? Can you standardize collection strategies by type or value of customer? Are you able to process alternative forms of payment? Is there any way to reduce sales cycle time?
Improving your AR management can lead to significant financial gains, something everyone wants for Christmas.