Here are 5 tips on how to get the most out of your monitoring efforts:

1. Watch key metrics. It’s easy to say “let’s monitor our customers,” and then go off devising a complex plan full of intricate triggers, rules and metrics pulled together from internal and external sources. For most businesses it makes sense to watch a core group of items such as public records (like liens, judgments, and bankruptcies) and credit score changes. Start simple and measure your results. You can always get more complicated, but don’t risk having users tune out, by making it overly complex.
2. Monitor all of your customers. I know this sounds expensive or time consuming, but the cost of catching a single write-off often will pay for whatever process or service you put in place. It is best to start with customers that have active credit balances in the last 12 months.
3. Publish a daily report to the team. Try to consolidate your alerts into a single report to review each morning with your team, that way you can assign owners for each item. Alerts that are triggered “as it happens” intuitively makes sense, but in reality you’ll likely be away from your desk and end up reviewing alerts on your Blackberry or iPhone. It’s easy to forget to come back to that alert you received 10 minutes into an hour long meeting. Stick with a 15 minute review of a single document each morning, rather than trying to piece together all the emails you received throughout the prior day.
4. Assign an owner to follow-up on each alert.It’s just as important to be aware of a potential problem as it is to follow-up. Again, stick to a process. Review each alert, assign them and then close them out so nothing slips through. An alert triggered by a news story about significant layoffs at a key customer could be a clue as to future payment problems or just normal business cost cutting. Either way it is best to bring the alert full circle and determine next steps if any.
5. Get the big picture and share with upper management. It’s important to step back every month and review the customer portfolio overall. What are your top credit balance accounts? Your riskiest accounts? Overall aging this month versus last? The idea is to present a proactive approach to management to show you are on top of your customer portfolio and not likely to be surprised.

Have a tip or process for monitoring your customers? Comment below to share them with the community.

So credit leaders at the high end are in information overload. They are bombarded with free and paid sources mostly focused on large public companies, internal systems, and management reports. At the other end, there are those without many information sources or tools who are also overloaded with manual research, weeding through cumbersome reports and simply relying on institutional knowledge. For both groups getting solid intelligence on the vast majority of their portfolio (likely close to 100% private companies) is still a challenge.

This week we are rolling out Cortera PULSE. You’ll find it a simplified approach to customer risk monitoring and alerting. If you are like me, you want the facts without any fluff and that’s just what gets delivered each day. Here is what you get:

• The ability to monitor all of your customers
• A single, daily risk alert in a consolidated, easy to follow format
• Alerts on liens, judgments, bankruptcies, news and credit score changes
• Thousands of news sources consolidated down to only the financial stories that matter to you
• Coverage of 20,000,000+ private businesses (public too, but that’s the easy stuff)
• A monthly management report that sums up your customer portfolio with actionable insights into your top credit balance accounts, riskiest accounts, most collectible accounts and more

Interested in learning more? We’ll give you a personal tour. Give us a call or click here.

A Q&A with Dave Schier, Credit Manager, Jacobus Energy

The last 18 months have certainly been a challenge for credit pros as even your oldest customers have become problem accounts. Can you share some of your tips on how to collect from a long-term customer that has started paying slower than normal or not at all (without jeopardizing the future relationship)?

Dave Schier: No easy solution. Usually I sit down and speak with the higher ups (owner, controller, VP, etc) to discuss. We talk about profitability of the account and how their payment affects our profit. I let them know that our purpose in business is to make a profit while maintaining a partnership with our customers. I try to keep it simple sticking to the facts but still let them understand that there is little reason to business with anyone, even a long term customer, if it isn’t profitable.

How far do you push it before you walk away?

Dave Schier: Like in any negotiation, in order to be successful, the customer has to infer (without you saying it outright) that you’re willing to walk away from the business if an agreement can’t be reached.

The June 2010 ISM Manufacturing Report on Business also showed healthy numbers with the eleventh consecutive month of expansion in manufacturing activity. However, it’s not all positive news as the ISM index dropped from 59.7 in May to 56.2 in June. Readings above 50 indicate an expansion; below 50, a contraction. One area to watch is the new orders component of the ISM index – it dropped from 58.5 to 65.7. While still in expansion territory this could indicate a more moderate pace in the second half of 2010. The Commerce Department also reported today that demand for durable goods dropped 1 percent in June—another sign that the recovery may be losing steam. We’ll be watching the SCI closely for any signs of weakness.

You can check them all out here, at our official contest site: www.thecomeback2010.com

We’d just like to take a moment to thank all of the entrants for their thoughtful submissions. We were genuinely moved by the amount of time, effort, and creativity that went into each of the entries, and we wish you all the best as you continue to drive your businesses forward.

Thanks again for spending time with us over the past few months, and we look forward to seeing all of you in the Cortera community!

Our contest sought to find the best small business stories out there – those that inspired while providing insight on how small businesses can continue to thrive in tough times. It’s no secret that it’s been difficult out there for American small business owners lately, and we found ourselves truly taken by the quality of the submissions.

So, head on over to our contest site to look at our semi-finalists – thecomeback2010.com – learn more about each of them, and view some of our other outstanding entries!

Jim and Alex on stage demoing Cortera Circles. Create your Circle today! www.cortera.com

1. Call AP: Cooler heads prevail, so be professional and calm. Instead of calling into your primary contact, call the main office line and ask for Accounts Payable. Usually a simple inquiry can determine if your invoice has been approved for payment and submitted. If they have no record you’ll need to go back to your primary contact. If they do have a record of it, ask when the check will be processed. Some companies have long payment cycles, so you might be stuck in a holding pattern, but at least you’ll know that you will eventually be paid for your services.
2. Follow-up regularly: If your invoice has not made it to Accounts Payable call your primary contact again and ask specifically who you should talk to about getting your invoice approved for payment. Follow-up with the same message in email to document your conversation or voicemail. Be firm, factual and reference any legal agreement you have in place that specifies your payment schedule. It is worth asking if there is any problem with your work. Set a reminder in your calendar to call back/email in two days. Try also calling during off hours (early in the morning or after 5:00 pm) or even their mobile phone if they travel for business often.
3. Send a letter from your attorney: If your client is no longer responding and it has been months since you expected payment, you will need to be more forceful and send a letter demanding payment or face legal action. There could be still be a reasonable explanation, but the likelihood of future business is unlikely so you should focus on simply getting paid. A letter from your attorney addressed to your primary contact, the senior-most person in that department and the attorney for your client will get their attention.
4. Tell the world: In today’s connected world, there are more and more places to express any dissatisfaction with a business. Tell the Better Business Bureau, websites like Yelp and Cortera allow you to post online reviews about your experience. Businesses monitor their reputation online carefully so a few negative ratings across the major websites might just get their attention and you eventually paid.
5. Take them to court: As a last resort you can take them to small claims court. Most small claims courts allow you to represent yourself in court. Small claims court is also very informal making it accessible to anyone.

1. Lawsuits are a matter of public record. Before agreeing to provide services, you can check your local courts to see if your potential client has been sued by a fellow freelancer or other vendor. Many jurisdictions make their court dockets available online.
2. Conduct a background check on your potential client. Entry level business credit reports can be purchased online with a credit card from bureaus like Cortera and others. These reports outline the business’ payment history and help predict future payment behavior.
3. Check the various websites that rate local businesses like Yelp, Google Local and Yahoo Local. Look for negative reviews and ratings as a potential warning sign. A simple Google search can also reveal quite a bit about a business.
4. Ask your peers on social networking websites like Facebook, LinkedIn and Cortera (shameless plug for Cortera Circles – but hey it’s a free and all about sharing payment experience on businesses so worth a look!)
5. Don’t perform any services without first getting a written contract in place with your client. Among other things, the contract should spell out, with particularity, the services you have been retained to perform, the amount you will be paid, when you will be paid. For artists, designers, or other technical and creative freelancers, you should ensure that the contract protects your intellectual property rights. A small investment in legal services could save you down the road.There are even free contract templates that can be downloaded from the Resource Center of elance.com.

If you follow all of these precautions and still don’t get paid, you can sue your client. Most small claims courts allow you to represent yourself in court. Small claims court is also very informal making it accessible to anyone. And don’t be shy about using the above websites to share your experience with others – your rating could save another fellow freelancer.

I’m not a lawyer so here is the standard warning: The recommendations set forth herein are not a substitute for legal advice. You should speak to an attorney licensed in your jurisdiction if you wish to obtain legal advice about these matters.

Have another tip? Drop me a comment.