Your ARMor

The UCS Newsletter, providing A/R management and debt collection insights, with the commitment of maintaining the important balance between

Results and Relationships
 vol. 7 issue 1
Table of Contents

It's Time for a Debt Check-up. How's Your A/R?

You Might Be Over Your Head in Debt if...

UCS: All Around Town​​​​​​​
"I've worked with United Credit Service, Inc. for over 25 years and have found their staff to be very professional and knowledgeable.  UCS has provided our patients and our staff with outstanding customer service while also providing excellent collection results."

--Director of Patient Financial Services, Large Midwestern hospital

Hi, Ruth,
I just received an awesome compliment from a consumer you were on the phone with. she said you were such a pleasant and nice person to deal with.  She said you really listened to her and her situation and were willing to work with her.  She has been sent to collections a few times in her 70+ years and she has never dealt with someone as nice as you.
Awesome Job!!

I would like to say a BIG THANK YOU to one of your associates--Krys for going above and beyond helping the customer.  I greatly appreciate everything that Krys has done for me to eliminate my debt in a timely manner.
             --a consumer

You have been great to work with on this unfortunate issue.  Thanks you so much for your kindness.  Please apply this check to reference # XX-XXXXXXXXX.
   Thanks so much,
         --a consumer

Every year we make resolutions to become fit, lose weight, eat healthier and so on. For the past few years my wife and I have spent New Year’s Eve with the same group of friends. Each year we’ve written down our resolutions, then the following year we revisit what we wrote to see how we did. Do I need to tell you how that’s gone? Not wanting to name names I’ll say this much: According to U.S. News & World Report, 80 percent of New Year’s resolutions fail by February.

Unfortunately we’ve reached the time of year when it seems like our resolutions are now in the rear view mirror. But that doesn’t mean we can’t still keep an eye on our health by getting an annual check up to see how we are doing. The old saying, what does not get measured does not get done can certainly be true for our physical health.

But what about the financial health of your business? Do you get regular ‘check-ups’ on the state of your finances, especially your debt? As a country it seems we haven’t seen a ‘debt doctor’ in quite some time. And debt, like our waistlines continues to grow each passing year.

A good source for a check up on consumer indebtedness is the Federal Reserve Bank of New York’s quarterly report on consumer debt in America. Their reports are a good indicator of trends and factors, good and bad, which drive the growth of consumer debt.

Based on their current report, we need to put another notch in our debt belt. Here’s a quick snapshot from the end of last year’s report.

  • 18th consecutive quarter, total household debt reached record levels.
  • End of 2018, total household debt reached a massive $13.54 trillion.
  • Up $32 billion from third quarter 2018.
  • It is $869 billion higher than the previous peak reached in third quarter of 2008.

While the Fed has been quick to point out that, at least to this point, the strong economy, low unemployment, and job growth will sustain our ability to pay our debts, any softening in the robust economy could have disastrous effects.

In this newsletter we will be performing a little debt checkup on both sides of the debt equation: from an A/R business standpoint as well as how we, as consumers, can tell when we are in over their heads.

If you are a current client, thank you. We appreciate your business. If you are a prospective client, we’d love the opportunity to earn your business.

We are here to help!

Best regards,


It's Time for a Debt Check-Up. How's Your A/R?

The economic cycle is made up of four phases: expansion, peak, recession, and trough. Right now we are in an expansion period and have been for a while. The debate? When will it peak,  then recede?

Low unemployment is often seen as the beginning of the end of an expansion phase. Since our unemployment is at a fifty year low you might be thinking, uh-oh. But not so fast, full employment, in of itself, doesn't always mean an expansion phase is over. Vigorous economies can last for years with low unemployment as long as inflation is under control.

Here’s the thing, it is very difficult to predict the timing of economic cycles. If only, right? But what we know for sure is the expansion phase won’t last forever.

Unless you are a business that collects 100 percent of money owed at time of service you’re going to have accounts receivable. But what is an acceptable percentage, especially for the ones past-due? Unfortunately that number differs depending on a number of factors like industry and type of customers you do business with.

The important thing is to track your accounts receivable so you know how it’s going. During an expansion phase, like we are experiencing right now, your A/R should be in fairly good shape. Things to monitor include:

  • volume of receivables
  • dollar amount owed
  • Age of account

If you are experiencing an uptick in any of these areas you might want to tweak your process. Consider the following:

  • How quickly are you sending out a bill?
  • Are you consistent with your billing?
  • At what age do you consider an account past-due?
  • Do you have a good process in place to collect past-due accounts?
  • If using a collection agency do you send accounts consistently when they reach a certain age?

Granted, there are laws preventing certain healthcare organizations from sending accounts to collections until they reach a certain age, but most other businesses are in the driver’s seat when it comes to deciding how old is too old.

When to send accounts to collections is a subject near and dear to our hearts—we’ve written about it numerous times in blogs and other newsletters. Why? Because as the saying goes, time is money. This is especially true in the collection industry. There is a direct correlation between the age of an account and its collectability. The older it is the harder it is to collect, period.

I’m not telling you not to work your past-due accounts before sending them to collections, quite the contrary. Most of our clients do—some quite successfully! But if you are going to work them do it quickly then send them on.

I get it. You want all the money owed to you. Your business has already incurred the expenses and your A/R represents your uncollected profit. But as frustrating as all of this is sitting on the accounts is not in your best interest.

Right now the economy’s health is strong. By keeping a finger on the financial pulse of your business it can remain healthy even when the economy begins to slump.

Do a debt check-up, stay debt fit and let us help you keep up your financial fitness.


You Might Be Over Your Head in Debt If...

Since we live in a credit-based society most of us see debt as a way of life and have become pretty darn good at the balancing act of acquiring and paying off debt. But what happens when balance is lost and the scales start to tip in the wrong direction? Would you see the signs?

Carrying too much debt not only could affect your credit score (and all that comes with that!). It can also disrupt your personal life by: increasing stress levels, causing sleepless nights, wreaking havoc on relationships and even negatively affecting your overall health and wellbeing.

Sometimes there is an obvious precipitating event like a medical emergency or unexpected costly car repair that throws your budget out of whack. Other times extra debt can slowly sneak up on you with an extra meal out here or a must-have pair of shoes purchased there.

Knowing your debt to income ratio (DTI) is a critical part of understanding your overall credit health. Calculating your DTI ratio is fairly simple: It is your recurring monthly bills divided by your gross (before taxes) monthly income. Your answer will be in the form of a percentage. Unfortunately people in the know don’t all agree on what that number should be. But according to Credit Sesame most lenders want to see your monthly housing debt as no more than 28% to 33% of your income, with your total debt being no more than 38% of your income and NerdWallet suggests 36%.

Without calculating your DTI there are some other telltale signs of unhealthy financial fitness. Things like missing payments and not answering phone calls out of fear it’s a bill collector are obvious red flags, but others are a little more subtle:

You might be over your head in debt if…

  • You think you are. Trust those instincts. If you are questioning whether you have too much debt, chances are you do.
  • You don’t know how much you owe. If the thought of tallying up how much you owe or having a conversation about your finances makes you want to stick your fingers in your ears and say, ‘lalalalala’ you might be over your head.
  • You borrow money to pay your bills. If you’re paying one credit card with another or borrowing money from family or friends to meet your monthly obligations you’re probably in over your head.
  • You use a credit card to buy groceries. If you don’t have enough money to pay bills and eat you’re more than likely in financial trouble.
  • Maxed out your credit cards. If you are out of credit and you’re only making the minimum payments on the cards you have you’re probably in over your head.

So what do you do if your credit health isn’t doing as well as you had hoped? Luckily, there are many things you can do to pay off debt and improve your credit health. As a matter of fact we’ve even written blogs about it. Check out the one here if you want to understand two popular methods: the avalanche and the snowball.

Like so many things in life identifying there is a problem and wanting to make a change is over half the battle.

Image provided by: Wikimedia Commons

UCS: All Around Town

Where are we Going?


Spring Conference

May 14 - May 16, 2019

The Wilderness

45 Hillman Drive

Wisconsin Dells, 53965

 Hope to see you there!

United Credit Service, Inc.
15 N. Lincoln Street, P.O. Box 740
Elkhorn, WI 53121