Here’s to You—Small Businesses of the U. S.—This Blog’s for You!

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October 4, 2013 by Lisa Brammer

This blog is for the 28 million small businesses here in the United States—for all you do—this blog is for you!

And believe me, small businesses do a lot; they are the life-blood of our economy. Did you know small businesses account for a whopping 99.7 percent of U.S. employer firms? Who would have thought, right? But I got that statistic straight from the U.S. Small Business Administration’s official website,

At the risk of sounding sappy, I’m going to ask, what do the words American Dream mean to you? To me, the American Dream is knowing that if you work hard, you can be successful and build a good life for you and your family. When my grandparents came over from the old country, back in the day, that’s what they were looking for—and found I might add. I know some people think the American Dream is a myth (those darn naysayers) or that in this economy the search for it has ended. But, I’m here to tell you, the American Dream is alive. It lives on because of the courage, drive, and ambition of the small business owner. It lives on because of their employees, who show up each and every day working hard in a collaborative effort to make those businesses thrive.

The U.S. government defines a small business as an independent business having fewer than 500 employees. But, it’s important to note that only about 21 percent of the small businesses out there actually have employees.

But, do you know what’s really impressive? Those 21 percent create 64 percent of the (net) new jobs in the U.S. each year. That means 2 out of every 3 new jobs are created by small businesses—each year!

These small businesses are the backbone of our communities and a source of pride for the working families within them.

Each and every day, we see America’s entrepreneurs step up and take risks with their innovative ideas to help us all succeed in the future. But the truth is, only about half of all new establishments will survive five years or longer.

Small businesses, not unlike their larger counterparts, rely on a healthy cash flow to remain solvent. For a small business, bad debt can really mean the difference between viability and net losses that could lead to business failure, so it’s important for a small business to understand how to collect the revenue owed.

If you are a small business that needs to get paid for your products or services, here are a few helpful tips to help avoid bad debt:

1. To avoid misunderstandings that could lead to bad debt, it’s important to set expectations regarding payment. Have a financial policy in place so everyone (both employees and clients) understands when payment will be due and what actions will be taken if it is determined that a customer is avoiding paying. Don’t forget to do your research and check your state’s laws regarding interest charged on unpaid balances. There are laws regarding when and how much interest you can charge.

2. Get all relevant information before any transactions take place. You need to be able to contact these people or companies. Have all pertinent information (e.g. addresses, phone numbers -both land lines and cell , Social Security numbers, driver’s license numbers, and Federal Employee ID numbers). It’s a no-brainer, but you won’t be able to collect money from someone you cannot find—believe it or not, this happens a lot.

3. List an actual due date on your invoices. It is not a good idea to have your invoice read payment due upon receipt. That kind of ambiguous language might get your invoice placed at the bottom of the to-be-paid pile or worse yet thrown in a drawer.

4. Don’t wait until 30 days from date of service (or delivery of product) to send out a bill. Bill as often as possible—I know businesses that bill twenty-some days out of each month. Get that clock started, the sooner you send out your invoice, the sooner you will get your money. (Your customers should be expecting the bill since you spelled this out for them in your financial policy.)

Unfortunately, sometimes bad debt is unavoidable. In that case, here are a few tips on collecting on those bad debts.

1. Call the debtor. Identify yourself and your reason for the call. Tell them when the payment was due and ask about when you can expect payment. Be careful with the attitude you are projecting and watch the tone of your voice. You do not want to harass or alienate your customer, but you do want to be straight-forward and direct. It will take a little finesse to keep the relationship positive while firmly requesting your money, but don’t lose hope, it can certainly be done! Also, it’s a good idea to keep a record of all contact you have with debtors—you might need this information down the road if it becomes necessary to take legal action.

2. If you haven’t been paid in another 15 – 30 days call them back repeating the above tip. At this point, you might want to ask a few more questions so you can understand what is holding up the payment. But tread lightly, you don’t want to make this personal or come off as judgmental. Depending on what you find out, it may be time to suggest a payment plan, something agreeable to both parties.

3. If more time has passed without payment, refer to your financial policy so you can initiate the consequences that were prearranged in your policy.

If you do not get the results you were hoping for or if collecting on your bad debt is taking more time and money than you had hoped, you might want to refer those accounts to a reputable collection agency.

Most collection agencies get paid on a contingency basis, so there will be no risk on your part. No collection = no fees.

You may worry that your small business is too small to use a collection agency because you only have a few accounts that need to be collected. And while it is true that some agencies only want those large accounts, there are other agencies out there who, like us, understand the importance of the small business and can customize a collection program for any size business.

So, to all the small businesses of America who are keeping the dream alive— we take our hats off to you. Thank you for all that you do! And remember, this blog was for you.

United Credit Service, Inc. is also a small business. Founded in 1950, United Credit Service, Inc. is a full service revenue cycle management and debt collection agency in Wisconsin providing highly effective, customized one on one management and recovery solutions for our business partners. Visit our website at or call 877-723-2902


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