By Tony DeLorenzo
The combination of significantly warmer than normal temperatures along with continued high energy costs and increased consumer bad debt has affected both consumers and home heating suppliers alike. There are few valuable tips for avoiding credit card debt which is the source of becoming completely bankrupt.
Everyone from residential heating customers to hospitals, local and state municipalities, small businesses, schools and the motoring public are feeling the effects.
A recent survey by NYSERDA and the NYS Consumer Protection Board found that many home heat suppliers are extremely concerned about their receivables going into 2007.
One owner in the survey stated: ‘We experienced extra borrowing to cover the purchase of higher priced oil and to cover the increase in accounts receivable. We also expect a large volume of customers who will never pay us, which will result in increases to our yearly bad debt expense.”
New England Home Heat Bankruptcies
In Sept 2005, Heating Oil Partners, a company serving a large segment of the Connecticut home heating oil market sought protection from creditors under U.S. and Canadian bankruptcy laws, citing negative effects of the price of oil. To get the best bankruptcy related advice,this https://www.thepopefirm.com/contact-us/ link need to be checked.
In March of 2006, P.P.C.O.M., a heating oil supplier in Maine, was forced into involuntary bankruptcy by Irving Oil due to an 11 million dollar bad debt. (Energy Information Administration May 2006.)
Does your company have an effective bad debt prevention policy?
The account receivable is the second most valuable asset any organization has and yet, it is the most overlooked until after a serious problem surfaces.
Companies that fail to implement effective bad debt prevention strategies will suffer from loss of profit and reduced cash flow, and they are essentially powerless to contain, much less reduce, revenue losses.
Trying to manage problematic credit and collection issues can be frustrating, time consuming and expensive. When you’ve tried, and failed to recover the money you are owed; either by working with a debt collection agency or through your own efforts, it may be time to invest in the services of a professional credit management consulting firm.
An experienced credit-consultant can recommend changes to improve efficiency; identify potential problems before they materialize and advise of methods to reduce risk.
DeLorenzo & Associates, a credit management firm located in Vermont offers more than 10 years of credit & collection experience in the home heat industry; and a viable alternative to the typical outside collection services available on the market.
The firm’s founder Andrew DeLorenzo has extensive home heat experience working with several home heating companies including Ultramar Energy, Star Gas, Irving Oil and Johnson & Dix, where he was employed as Corporate Credit Manager from April 2004 until September 2006.
While at Johnson & Dix, DeLorenzo worked closely with the company’s owners, management and personnel to reorganize, restructure and streamline the residential and commercial credit operations for Johnson & Dix’s six Vermont and New Hampshire divisions.
Within the first six months of implementing DeLorenzo’s new debt prevention plan, the company’s over 60 day receivables decreased by 50 percent and consistently continued to do so, over the next two years.
In fact, the company’s 2004 FYE Bad debt reserve decreased from 14 percent of sales to 7 percent; and 2005’s FYE Bad debt reserve decreased from 7 percent of sales to 1 percent.
To contact DeLorenzo & Associates about how they can assist your company in developing credit strategies and infrastructure capabilities, e-mail firstname.lastname@example.org.