Recent devastating world events have created substantial corporate disruption. Past notable incidents severely impacting day to day business include September 11, 2001 which destabilized global markets; Hurricane Sandy in 2012 which inflicted nearly $70 billion in damages; and the 2010 volcano in Iceland which restricted travel in Europe and interrupted the supply chain. These unpredictable events leave businesses in search of protection under contractual obligations with critical vendors. As credit and collection professionals this could lead to nonpayment disputes with regards to this clause if applicable.
The COVID-19 world health crisis has frozen commerce and left many businesses with a significant decrease in cash flow. Consequently the Force Majeure (Latin for Superior Force) clause is becoming more relevant. As a credit and collections team you should review all signed agreements to confirm this clause is in fact cited in your organizations terms & conditions.
A common legal clause in many agreements that permits your customers to restrict responsibility when exposed to some unexpected and extraordinary circumstances.
Taking a deeper dive into this leads on to determine what is defined as circumstantial events to invoke the clause. Standalone pandemics and epidemics do not have to be classified as force majeure event, but the consequences of such episodes (ex. port closures or suspension of transportation) severely impact the market and invoke this defense.
“A force majeure clause sets forth limited circumstances where a party may either terminate or not perform certain contractual duties without liability due to the occurrence of an unforeseen event. Whether this is a valid defense depends on the language of the clause-i.e. whether, or not, it specifically mentions a “pandemic” or “public health emergency”. Whether or not Covid-19 falls into such a clause would depend on the specific wording of same. You also have to look at any other specific requirements in the clause defining what is excused, the circumstances of same, notice requirements, etc. It is really contract specific as to whether or not such a clause applies. I’m sure there will be litigation over this in the future,” says John H. Bernstein, Esq.
In the middle of the COVID-19 health crisis, Global Hawk Resources does foresee an uptick with your customers invoking force majeure as a valid term of dispute. From a global perspective the Chinese government has issued an overwhelming amount of force majeure certificates since the pandemic began. Most of these claims will not hold up in English law as the provisions need to be far more specific. With this said we recommend reviewing your current contracts to determine if force majeure is cited in specific terms and to what length.
Founded in 2016, Global Hawk Resources is the worldwide leader in commercial credit and collection services. The company offers a wide range of products and services designed to optimize your organization’s bottom line.
Global Hawk Resources announces immediate availability of Base, enabling our firm to simply and securely accept Credit Card and ACH payment processing on behalf of our customers.
“We are always looking for process improvements. Partnering with Base allows our staff to secure credit card payments without having to go back to our clients. It cuts down on distortion and time to pay. This will subsequently increase our recovery rate across the board.” said Nick Morash, Co-Founder at Global Hawk Resources. “Global Hawk Resources’ commitment to deliver on our first-class debt recovery solution is highlighted with the addition of this payment option. Streamlining this thru Base and migrating it with our collection software adds a new advantage in this ever-changing third-party collection agency landscape.”
Founded in 2016, Global Hawk Resources is the worldwide leader in commercial debt recovery. The company offers a wide range of products and services designed to optimize your organization’s bottom line by recovering on receivables on average 60 days past terms.
Optimizing Cash Flow by Resolving Erroneous Payments
Global Hawk Resources announces a service to provide our clients a solution in tracking down double payments to their vendors. A major drain on the bottom line originates with duplicate payments.
“In a recent annual report, the US Government Accountability Office (GAO) disclosed 0.05% of invoices paid are payments made in error.” https://www.gao.gov
Does your organization have overpayments on account for accidentally paying the same invoice twice? Are you having issues recouping these losses? Global Hawk Resources is here to assist. Our trained staff will contact your customers to facilitate a refund on your behalf in a seamless and professional manner. Our white gloved approach will increase cash flow back into your organization and clean up open items on your balance sheet.
Founded in 2016, Global Hawk Resources is the worldwide leader in commercial credit and collection services. The company offers a wide range of products and services designed to optimize your organization’s bottom line.
Critical Data to Help Collect Your Companies Delinquent Receivables
Current Accounts: $1.00
3-months Overdue: $.70
6-months Overdue: $.50
1- year Overdue: $.23
2- years Overdue: $.10
** Survey Results provided by the Commercial Collection Agency Association (CCAA)
Past due receivables can severely impact the trajectory of a business. To fight this uphill and never-ending battle a company must instate a strict policy when dealing with delinquencies. Creating an escalation process from both an internal and external standpoint cannot be overstated. Utilizing collection tools and analyzing weekly aging reports will highlight problem areas in your AR that need to be addressed and resolved. Businesses must draw a line in the sand when dealing with aged balances and be aware that as these debt age they will become harder and harder to collect.
Imagine a future where the credit and collections department can become an overall profit center for your business. With the creation of “Receivable Intelligence” this becomes a reality and contributes to your company’s top line.
At Global Hawk Resources (GHR) we utilize both collections and customer service techniques to uncover trends on sales that went unpaid.
This process consists of a two pronged approach to secure payment on delinquent receivables and retrieve “lost sales” data analytics. GHR can assist in your overall portfolio risk management. Utilizing predictive analytics we can help you focus on the actual “dollars-at-risk” to insure your company is optimizing the receivable management workflow.
We take a collaborative approach to the order-to-cash process and will work alongside your sales and finance operations team(s) to proactively assess risk and identify opportunities within the portfolio. Let Global Hawk Resources unlock your receivables potential. We are looking to foster a long-lasting relationship that assists in the recovery of bad debt and assist with winning back business for your company!
Cybersecurity has been a priority for business leaders for many years. Yet, despite investments in security controls, cyber-attacks keep coming. Each organization’s credit and collection department that implements outside help on collections needs to be aware of the risks and safeguards that must be followed to avoid data breaches and hacks. Your third party collection agency is an extension of your own organizations policies and procedures, which includes security postures and controls.
Here are some great questions to keep in mind when choosing a secure third party collection agency:
Does your third party collection agency conduct security audits?
Does your collection agency transmit credit card payments and other highly sensitive customer financial documentation thru a secured environments? If so, what is the encryption level?
Does your third party have an IMP in place?
What safeguards are in place to protect data processing system outages?
Where is the documentation housed at your third party site? Is it in 1980’s style physical file cabinets that sit at their office open to risk?
What is the patch management for your collection agencies infrastructure?
Are OWASP scans done regularly and can your third party collection agency provide these results? Do the scans track vulnerability and security hot spots?
Here at Global Hawk Resources, we have taken the steps necessary to properly secure all data being housed and transmitted to the outside world.
Dunning letters have always been a standard approach to collect outstanding receivables. Sending a formal written request for payment by mail is a touch point with your customer. But, as the famous line goes, “Past performance does not always dictate future results.”
In the Spring of 2020, during the beginning of the global lockdown, most businesses forced their workforce to WFH. Opening the daily mail became an arduous task in this new environment. All dunning letters are directed to a company’s physical bill to address on an outstanding invoice. Most dunning letters, during this time period, ended up in a giant heap of unread mail collecting dust.
As a global third party collection agency, Global Hawk Resources, also sends out dunning letters. In the past 30 days, we have seen an uptick in communication from dunning letters we sent out 120 to 180 days ago. The regular feedback is, the debtor has reopened their business and is going through unopened mail and stumbled upon our letter(s).
We are also seeing a follow up comment that business is starting to pick up and these debtors want to pay down or off the balance. This is a unique and radically different response to most dunning letters Global Hawk Resources has sent in the past. It is also a narrative to the impact of COVID-19 on cash flow and day to day operations of most businesses. A sign of the times and an anecdote we thought worth sharing.
Contact us for a free Demo today to begin your journey with the GHR team.
In 2016 we started a virtual collection agency. At the time, not having brick and mortar space and working in a virtual environment wasn’t the typical path for establishing a debt recovery firm. Most collection agencies you encounter were created in the late 80’s, 90’s and early 2000’s during the time of fax machines, cubicles, and water coolers. A large percentage of these firms have not evolved and continue to operate in this capacity. When COVID-19 hit, the world was turned upside down. All companies were forced to create some form of remote office space including collection agencies.
Global Hawk Resources did not have to pivot to a new business model when most of our competitors were forced to do so. From collection software, phone systems and internal invoicing systems, most businesses had to adjust to fit the new remote work space. Global Hawk Resources did not face the multiple challenges other agencies faced and continued operating in our business model that relies heavily on cloud based systems, VOIP phone systems and remote field collection agents. Having a trusted outside collection partner that updates systems automatically through the cloud and has real time activity is vital in this new remote business world.
Technology and infrastructure are some of the biggest barriers to connectivity and workforce productivity.
54% of HR leaders indicated that poor technology and/or infrastructure for remote working is the biggest barrier to effective remote working in their organization.
Gone are the days of time card machines. There has been a massive shift to work from home.
88% of organizations have encouraged or required their employees to work from home and 91% of teams in Asia Pacific have implemented ‘work from home’ arrangements since the outbreak.
Contact us for a free Demo today to begin your journey with the GHR team.
We have all heard the saying, “Accounts receivable is one of the top two most important accounts on your balance sheet”, yet those of us tasked with managing the AR for our organizations are relegated to merely cost center status.
The truth is, collections can be a thankless task. However, consider the fact that it is probably more closely related to sales function than any other in your organization.
Those responsible for turning receivables quickly and efficiently are essentially “payment” sales reps constantly selling customers and clients on why they need to pay. Those exceptional receivables managers know how to foster relationships to insure payment is delivered on time and even occasionally before the due date!
Those of us who have been fortunate enough to make a career of receivables management know it is as much of an art as it is a science. Additionally, we seek out those difficult trial balances because that is a task we truly enjoy.
At Global Hawk Resources we combine our love of receivables and customer relationship management. We have reinvented and reinvigorated the receivable function.
We partner with our clients to help them, not only recover those once thought to be uncollectible receivables, but to also utilize our expertise, insights and information to help win back otherwise lost customers.
Contact us for a free Demo today to begin your journey with the GHR team.
Nick has an extensive background in the order to cash flow of a business, development and creating programs to assist companies in meeting their cash collection goals. A 2003 graduate of Isenberg School of Mgmt @ UMassAmherst where he received a B.S. in Business.
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Force Majeure = “Superior Force”
