Allow me to vent! This is to all overseas agencies who may not know how to forward claims to other overseas agents.
Firstly, two claims were placed with me from two overseas agents today against two commercial debtors in the Chicago area.
When
you forward a claim, the first thing you need to understand is that you
have to have all the proper documentation that will support the claim.
In other words, do I have to tell you that you need to have the invoices
and not just a statement of the charges representing the balance due?
This is standard operating procedure.
Besides
the invoices, I would like to have a copy of the contract, purchase
order, a shipping document, and any other document that will allow me to
communicate clearly, intelligently, and persuasively to the debtor. I
do not want to stop and say to the debtor, "I do not know and have to
confirm with the creditor".
Next,
why did you send me a bunch of emails in your home language knowing
full well that neither I nor my staff cannot read your native language,
and which is rarely spoken here in the US. Is it not a waste time to
write back to you, and ask you to translate the main points? This should
be common sense.
Before
you forward the next claim overseas, look at everything carefully you
have received from the creditor and make sure it is complete so that the
overseas agent can quickly and efficiently handle the claim on your
behalf.
Steve, you have a very valid, indeed serious point.
ReplyDeleteI work with companies who are in serious financial difficulties, and some of those have multi-currency, Country ledgers. The state of some of those ledgers in terms of straight accountancy is enough to make your hair stand on end. It also gives me grave concerns (as I mention elsewhere) about the quality of auditing both in the UK and it would now appear globally.
I have found money sitting in bank accounts as unapplied funds going back two years, relating to invoices which have been written off as bad debt. Consequently that means reversing the entry and re-applying it correctly. It amazes me how some of these auditors can miss such simple things. In the cases I am thinking of both were large companies with one of the big six accountancy groups in the UK as their auditors.
How the hell those auditors signed off those accounts as " a true reflection of the company's financial position", floors me. In fact in one case I did actually file a formal complaint to the relevant authorities and notified Companies House that the Return should be revoked and a new set of Retuns required to be filed.
In some cases I have had to rebuild the Sales Ledger; customer by customer, which is expensive and requires a lot of co-operation from the counter-party. The problem is compounded by the fact the record keeping of some companies, whether it be large PLC or macro business is appalling and you end up having to play "hunt the voucher". Again the audit train, or lack of it compounds the problem.
On the overseas front it is easy to find a translator for forein languages and relatively inexpensively. The issue lies with the co-operation of the Counter party and whether they are prepared to give you the information you need, particularly if in the situation above the issues go back to trading years.
The problem with overseas transactions is compounded when you are using a second currency as a common transaction between to Countries with differnet currencies, and you start moving in to the realms of Correspondent Banking. Trying to do audit trails on those sorts of transactions are a nightmare as you need to know the correspondent bank of the bank with whom your counter party banks with ! (phew)
On one occasion I found unapplied funds of several million US$ sitting in an account in a minor correspondent bank outside of New York.
With reference to credit checking counter-paries you do have the likes of Dunn & Bradstreet, Graydon Intl and of course the equivalent of that contry's Companies House.
Using Trade Reference is not recommended, in the same way as they should be treated at arm's length as they are easily rigged, but keeping three clients paid on time every time. This gives a false impression about thier reliability.
IF in doubt and the amount is significant and the risk apparently high, particularly Country risk, then use a Letter of Credit.
Chris R
The Credit Consultancy Limited
06613324
Most overseas collections we receive for B2B do not even have the correct legal name, in Australia all corporate details readily available and reasonably cheap credit reports also available, we receive especially bad paperwork from many European countries, usually they will try first to collect themselves then ask for us to clean up their messes no collect no fee basis. Interesting to see the number of accounts out of China on 90 credit and not Letters of Credit , keep up the good work
ReplyDeleteEvery agent who forwards an overseas claim has to put all the documents together as though they would be collecting the claim themselves. I have always believed that an agent who forwards a claim with incomplete documentation reflects an agency that probably also does poor collection work in general.
ReplyDeleteHi Steven,
DeleteI am agree with your words.
credit risk management and risk management consultants
Thanks :)