The #1 Resource Guide For The Staffing & Recruiting Executives
Wilson Cole is the founder and CEO of Adams, Evens & Ross, the nations largest credit and collection agency design exclusively for the staffing and recruiting industry. In 2008 he was inducted into INC Magazines, “INC 500” for being the CEO of Adams, Evens & Ross, the 307th fastest growing privately held company in America. This exclusive group of other INC 500 CEOs includes Bill Gates of Microsoft and Larry Ellison of Oracle.In 2007 Recruiting & Staffing Solutions Magazine’s Editorial Staff named him “ The Billion Dollar Man” due to the fact that he had collected or helped his clients collect more than 1 Billion dollars in past due debt over his career of almost 20 years as CEO of Adams, Evens & Ross.
I am asked at least once a week what are the three things I can do today that will help
reduce the chances that I will not get paid by one of my clients. The answer is pretty
simple, and I assure you that if you took an extra 10 minutes to follow my advice you
will reduce your risk considerably.
The three items are as follows:
This sounds simple enough but now I want to drill down to the next level on each of
these items to clarify what I want you to do.
When I ask you to get your paperwork in order and get the client to sign your agreement, I mean that you should send over your agreement and have them send it back to you signed BEFORE you start. I have met a few “wonder” recruiters that are very good at recruiting, and they have told me that they have a clause in their agreement that covers them even if the debtor did not sign the agreement. They typically have a clause that says something like, “If you fail to sign this agreement, then your receipt of this agreement means you accept all terms and conditions and you are bound by this agreement whether it is signed or not.”
I’ve had many recruiters tell me about this clause, which leads me to believe that there has been a very stupid attorney talking to your trade groups. I have talked to at least 25 of our forwarding attorneys, and they all laugh when I ask them about this clause. The simple truth is that it does not work. I can prove my point with one simple illustration, and if you are a recruiter that includes this in your agreement, then I want you to test the agreement in another venue. Please go to the bank in the morning and write something on the back of your deposit slip stating that the acceptance of your $150 deposit means they agree to give you a cashier’s check in the morning for $25,000. Please make your deposit, and then go back the following morning and try to get your $25,000.
I am not saying that we cannot collect if you do not have a signed agreement. The fact is over half of the accounts that we collect our client had no signed agreement. But not only will a signed agreement help us collect, it could be the deciding factor in enabling you to collect your account without our help. Also, please make sure you can find the signed contract once you receive the agreement back. And another side note: please put in your contact that the contract automatically renews every year unless cancelled in writing by either party. This will help protect you if you go years without getting a new contract signed.
When I say to do some due diligence on your client, I simply mean check them out. I realize that Recruiters do not get credit apps, okay, I understand. But you can do a simple google search to see if they have been sued, arrested, deported, a suspect in a double murder, etc. You can laugh, but those examples are actual results from several google searches we did here once when a company came in to collection. You can go to free sites or pay-per-search sites such as Knowx or Credit USA. Just see who or what you are dealing with. I assure you that if you follow my advice, one in 20 searches will bring up some pretty spectacular information. So set up a process for your assistant, your wife or your child (my teenagers are better than any employee that I’ve ever used). All you want to do is make sure that you are not dealing with a really bad guy , not only for your sake but also for the sake of your candidates.
When I ask you to set up a receivables system. I want you to set up a system that helps you get paid quicker. For example, NEVER send out an invoice that says “net 10”, “net 30” or even “due upon receipt”. You always want to have a date due by. For example, if you make a placement on December 1st , then you wouldn’t have your invoice say “net 10 days” because that only means that you will probably get paid between December 20 and January 15 . But if you put “Due December 10th”, then you could call on December 12th to see if the check was mailed. Think about it. When you get in your bills and you have an invoice on the 1st that says “payable within 10 days,” you may pay by the end of the month, but if your power bill or credit card bill came in and it said “due by December 1,” then you will stop what you are doing and mail the check or set it up to pay online before the 10th.
I also want you to have a process for following up if a payment is not made and a process for demanding payment before you turn it over to me to collect. If a company fails to pay you, I want somewhere in that process a demand letter that give a specific date that you expect payment as opposed to the typical demand letter that demands payment within 10 days of receipt of the letter. I also want you to send the letter certified. I am willing to wager that ½ of the accounts that come to my office would have paid our client originally if our client had spent the time and effort to send the demand letter certified.
So, these are the three things that I really want you to work on for the next few weeks until we talk again.
I wish you all continued success.