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Winning the collections war.

Article Excerpt
In the current slow economy, financial institutions, credit card issuers and businesses alike are all waiting longer to be paid, with an increasing number of accounts becoming delinquent. Collecting on these debts is more challenging than ever because the debtors have less cash and are taking longer to pay-forcing appraisers to spend more time on collections.

"Everyone is slower paying than last year," says Karen Mann, SRA, who operates Mann & Associates, Discovery Bay, Calif. "Bigger banks are slower than ever. Rather than paying in two to three weeks, they are paying in three to four weeks. Local governments (which were paying in two months) are now paying in six months."

The slower payments by businesses and individuals squeeze the appraiser's cash flow because overhead such as utilities and rent still need to be paid on time. The squeeze becomes even worse if the slow payments become truly delinquent. But there are some techniques appraisers can use to minimize the chance of this happening.

Pay in Advance or Charge?

First and foremost, according to Mann and several others, is to collect fees at the beginning of the business relationship. Mann has successfully employed this strategy with new clients, particularly with mortgage brokers. "They can be here today, gone tomorrow. The chance of not being paid by a mortgage broker is much higher than [the chance of] not being paid by a bank."...

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