As with any comparison of two things, there are always the pros and cons. Below is an outlay of the comparison of using a collection agency versus taking your debtor to small claims court. We have tried to remain as objective as possible. There are pros and cons to each side of the equation and many of the pros and cons reflect the cons and pros of the opposite side. 

The real question to be asked: Is your time worth more than what you would pay in a collection agency’s contingency fees?

The “honeymoon” face of your client relationship was extremely positive and exciting. Making the sale, sending the invoice, delivering the product, all seemed to be smooth sailing. However, your customer isn’t writing checks when payments are due, how are you supposed to know if it is time to send this client to collections? There is a point where you need to recognize your cash flow exceeds the importance of an irresponsible customer. 

This blog post isn’t meant to scare you. But it is meant to be a reality check.

Think of all the things that can threaten your business. There are so many, but here is a list of things that should concern you as a business operator. 

• A change in the marketplace
  • Like an oversupply of competing products
  • In Oregon, prices of outdoor plummeted to $50/pound of flower after the last harvest season
• A change in the legal landscape
  • New regulations have limited your efficiency
  • A pesticide or procedure has been outlawed in your market
• A disgruntled employee becomes a saboteur
• Your accounts receivable grows to an unmanageable amount effecting cash flow 

Extending credit is part of a healthy business. Few things are more important for those businesses extending credit then having a strong credit agreement/application.

Credit agreements need four crucially important clauses. These four clauses will determine if a debt is collectible or not collectible should your client default on payment. Without these clauses, it can be virtually impossible to collect on your business debt and cost many thousands extra.

If you and your cannabis business is thinking about extending credit but hasn't yet set up standards and procedures nor had its contracts reviewed by a professional attorney, then you need to call us! 

Why reinvent the wheel through trial and error, causing you to have clients that become debtors. CannaBIZ Collects will set up your entire Accounts Receivable process allowing your business to extend credit with confidence, while at the same time mitigate the risk from doing so. 

Some time around July of last year, a large Hemp/CBD manufacturer approached us asking for help and advice. They had several large accounts on their books that were way beyond 90 days past due. When they called, they had five accounts past due (with another three aging past due in the coming months). Three of these accounts were each over $75,000, with the rest totaling another ~$50,000 (to save you time on the math in your head, there was a total of ~$275,000 outstanding past due).

Your sales team can sell. It's what they do. And they do it well.You have cultivated the right training & environment for their success. Every day they make countless connections for your business. And each day they bring in dollar after dollar. Now the sales machine is humming right along! Are you making the mistake of having them collect?