Tax time is best time to think about collections (and writeoffs)

In a perfect world, where appraisers and mortgage brokers skipped down the street together handing daisies out to passers by, collections wouldn't be an issue. "Collections" would in fact mean stamps, or Beanie Babies, or maybe your prized full catalog of James Taylor LPs.

But collections are a problem in any business, especially in yours. You're an independent contractor in a world of many such vendors, almost none of whom can derail a loan and get the person who's supposed to be paying upset enough to sit on an invoice.

This week of all weeks, get out all your unpaid invoices, and put the ones that are lost causes into a pile. Consult with your tax professional and figure out if some of them can be written off as losses. You may get a bigger refund.

For the ones that aren't yet dead, develop a strategy. Take the ones that aren't dead in the water but that you have stopped collections on. (Ask your tax adviser if even these might be worth more to you as tax writeoffs – that is, if they should go in your first pile.) Call them. Yes, call, don't write, don't e-mail. Follow up the phone call with a letter and a new invoice, adding accrued interest. You do this so that when you eventually agree to take a lower amount, you hopefully haven't lost anything.

You've probably stopped contacting them because you're too busy. Fair enough. Task someone in your office with making the calls. Offer to share a percentage of whatever they collect. Collection agencies are good ideas for some businesses, but do tend to charge more than you'll get away with offering that support person in your office. Collection agencies tend to pick the low hanging fruit, too. Also, they won't be able to promptly and authoritatively answer questions (stalling tactics, maybe), especially of a technical nature that someone in your office will.

The point is they're not going to ever pay if they haven't yet and you've stopped asking or telling them to.

Among your unpaid invoices there will also be a number that aren't quite so overdue that you've given up. Call and make sure the right person has the invoice. Send a new one, getting a name, if they say they don't. Ask if a discount will get the bill paid more quickly, say within 10 days. (Don't go overboard and offer half off!) Keep records of all this correspondence and conversation.

Two things that can make collections ten times easier are XSellerate and Enterprise level XSites with credit card processing. XSellerate automated marketing offers pre-written collection letters, and the ability to automatically schedule them. If you said "I don't have anyone else in the office but me!" when we suggested hiring someone in your office to help you with collections legwork above, you should particularly look into XSellerate.

Enterprise level Appraiser XSite owners already have XSellerate bundled in. If you haven't broken it out yet, while you're thinking about outstanding invoices and collections is a great time to do so.

Credit card processing from your XSite is a great collections tool. For XSites, we partnered with a bank we have known for years, Kirkpatrick Bank, to provide merchant account services to our customers and streamlined the application process between you and the bank. We pay the $50 application fee to get you a merchant account and seamlessly integrate the application process into your XSite. Just fill out the form and DirectFax it back. This is a real plus, because anywhere else you would have to go to the bank to apply for the merchant account and go to a third party vendor for the shopping cart integration. We do it all in one place – for free.

Your cost to accept credit cards through your XSite is limited to a 3.3 percent "discount fee" – that is, 3.3 percent of each transaction – and $5.85 a month to for account maintenance, both costs paid directly to the bank. (You don't pay us anything other than your annual XSite fee – you don't even pay us back for the $50 application fee!) For that you get the ability to bypass checks, and promises that checks are in the mail.

And the ability to accept credit card payments will help you avoid collections in the first place, by getting your invoices paid promptly and smoothly. Since we know how appraisers work, we made the XSites "shopping cart" fit your needs. You can charge cards directly from an XSite order. The charge automatically is tracked in the order details so you will have a permanent history of everything that happened with that order. You can charge one of your customer's credit cards even if you're not in your office. From any computer, just log into your XSite's Admin functions. To top it all off, we've even given you access to a shopping cart from your mobile device! Who needs the ability to charge cards on the run more than you do?

Take the time while you have to be thinking about your income and expenses for the year anyway to clean up your outstanding accounts. And think about investing in an Enterprise XSite and XSellerate, to make the process more painless next year.