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TAP 10 | Debt Collection


With the ongoing pandemic and its effect on the economy, lenders who were not previously using debt collection services are going to see its value sooner, as everyone becomes more cautious about what the COVID-19 crisis is going to mean for their businesses. It is often tough to collect payments, especially when so many companies are taking a hit from the pandemic. Taking the lead in this type of service is ABC-Amega, a Buffalo-based company that caters to B2B clients worldwide. With an army of highly trained collectors, the company provides first- and third-party back-office services to its clients. The company’s Senior Vice President, Domenic Di Loreto, joins Brian Powers to give you some tips that will help you ensure cashflow even in these difficult times.

Listen to the podcast here:

Cash Flow and Collection Tips During The COVID-19 Crisis With Domenic Di Loreto

Welcome, Domenic Di Loreto from ABC-Amega. We are happy to have you. Tell us a little bit about you and your role at ABC and then tell us about the company.

I’ve been with ABC for many years. I’m on the business development side, Senior Vice President of Business Development. I’ve got one of the better jobs at ABC because I get to meet the clients and prospective clients along with our staff of sales team members and talk about the services that we offer and all the good things that we do for our clients. The real hard work in the blocking and tackling comes for our collectors, our first-party customer service representatives. ABC was formed in 1929. We are fully licensed and bonded. We are a full-service commercial collection firm. All that we handle are commercial transactions. We’re based in Buffalo, New York, down the throughway from Poughkeepsie. We are very proud to be part of the BDO BRN group. We’ve been in that group for several years and some of our great clients have come out of the BDO Alliance. We are thrilled to be part of this.

That’s how we know each other. The firm JGS is part of the Alliance as well. People have heard me mention that and it’s a great resource, not only for our clients but for yours as well. It gives us the opportunity to meet companies like yourselves.

Some of the other highlights for us at ABC besides celebrating our 90th anniversary in 2019, the other things that we’re doing and the services we offer most importantly are first and third-party collection services. The first party is one of those things where we’re augmenting the staff of a company. You don’t have all the resources. You don’t have time to hire people. We become your back office collection team where we’re calling on behalf of our clients, representing ourselves as part of their department in the AR group, following up on invoices, checking to make sure there aren’t any disputes or pricing issues and essentially getting down to the nitty-gritty of when can we expect payment on behalf of our clients. That’s a seamless first-party service that many of our clients ask us to do. Third-party is more that standard commercial collection agency representing our client, and we look to recover their funds. Everything is very professional. It’s all above board. We are fully licensed and bonded. We have a great rating with the Better Business Bureau. We found over the years that you can get results in collections by being professional and ethical not like a lot of the other tactics that we read about or hear about on the news with other firms.

One of the reasons I thought to have this conversation is because of unfortunately what we’re going through now with the pandemic and the effect it’s having on our economy. A lot of people that maybe didn’t need a collection service before may need to look at that now. Maybe talk a little bit about what you’re seeing from your client’s perspective, what they’re going through on that end.

We’ve done a survey of all of our major clients throughout the country and throughout the world, because we do collections domestic as well as internationally. Every country where the US has a trade alliance with as long as there aren’t any trade sanctions, we can collect in that country. Through this survey and the results, what we found is in some industries it’s business as usual despite the pandemic. Things are still okay, but everyone is a little cautious. In other industries, it’s gotten tough. Some of the things that we recommend to our clients and the JGS clients is first and foremost, you can’t take for granted any longer that some of your best-paying customers will continue.

If you’re not reaching out to them on a more periodic basis, now is the time to do that because you have to find out for sure that things are still well, the lights are on and the machines are still moving. To do that is prudent. You can’t expect the invoice just to be paid. Right now more than ever, we find that customers appreciate the phone call or the email, something to show that extra concern. We think that’s one of the first and foremost things. If you don’t have a back office doing that, make the time yourself as part of the management team of the company. Have somebody make those calls. It makes a big impact, especially if it’s upper management that’s calling some of these key customers.

TAP 10 | Debt Collection

Debt Collection: If you are a critical vendor for your customer, it is their responsibility to keep you current on some payment plan if they are struggling a bit.


Some of the other points we’re seeing if you’re seeing times are tough, consider extending your payment terms a little bit. We always say that something is better than nothing. Maybe your receivables might age a little bit further, but extending that olive branch and payment terms goes a long way. You’ll find that those customers of yours that you might be offering payment term extensions too, they’ll go the extra mile for you. They won’t forget it during this tough time. There are ways to get around some of the issues. If you wait for them to reach out to you, that makes a lot of sense. Nobody wants to slow down their cashflow if they don’t have to. Those phone calls that I talked about previously, you’ll learn something very quickly from your customers when you do that. You’ll hear if times are tough and you can start adjusting and anticipating perhaps that they are going to ask for a payment extension.

It lends that the overarching theme that I’m hearing from a lot of people is that communication is key. It’s not ignoring it or being proactive instead of reacting to it.

A third point, are you a critical vendor for your customer? That’s key because if you are, if they need your product, your widget, your service in order to keep their lights on, then it’s their responsibility as your customer to keep you current, or on some significant payment plan if they’re struggling a little bit so they can keep going. You do hold the cards as a company or as a manufacturer if you are a critical vendor. Even then, we’re always recommending sensitivity. Just because you hold the leverage doesn’t mean you can push it too far. Critical vendor status is important.

It could be obvious but it’s something you’ve got to pay attention to now since it’s a different time. We’ve never lived like this before.

The other thing that you’ve covered in a previous episode that you had was credit cards. There are some fees if you’re going to start accepting credit cards from your clients. There’s a benefit in getting your cash, pay those merchant fees, but you’re getting cash in the door versus having to wait and perhaps getting some promises that are broken for payment. It buys your client 30 days or more time on their corporate credit card or personal credit card so that they can deal with that payment down the road instead of stringing out their cash.

We spoke to the people at Payroc. They’re even offering help with getting you set up with a website that will accept payment. That’s an added feature that you can take advantage of through them. If you’ve never accepted payment before via credit card, it might be smart to start to look at that and get it going.

Now more than ever, it’s one of those things that at the end of each day, which seems to be much more grueling considering most of us are working from home. There are longer days. You’re looking at emails constantly now. You are a captive audience for your customers or issues. Now is the time to investigate. Are there new opportunities? Are there new ways of doing your business so that you’re smart and you’re getting cash in instead of being put out to pasture slowly by a client who’s going under?

Now is the time to reach out to your clients to find out if things are still doing well in their business. Click To Tweet

I like what you said before, be the one that’s standing out and saying to your customer, “I’m still here. I want to hear what’s going on with you. We also need to get paid to keep our lights on.”

Some of your customers may find an opportunity to perhaps get into new markets. We’re seeing companies repurpose some of their products that are going into healthcare type of products as well. Companies that are making cloth awnings are now making masks and so on. It’s a time to challenge ourselves to look at how else you can plug into different markets. If your clients are in strong industries, even now during this pandemic, that’s great. Let’s also remember that while their industry might be strong, they still may not be getting paid. They may be working hard and maybe even increasing staff, somebody is still in the whole payment game. Somebody may be slowing down the whole cycle.

We’re taking this day-to-day, week-by-week, but let’s look six months out or even three months out. We only wrapped up Q1. Let’s look at the third and fourth quarters. What are things going to be like? How are you talking to your clients about that? I’m sure we’re going to see people going into bankruptcy. They’re already talking about some states going into bankruptcy. What are you advising your clients to look for when it comes to that?

When it goes back to the whole payment habits of your customers, now is the time that if you’re in any doubt, if you have any concern, if you think, “They’re 60 days past due, let’s give them more time.” We encourage you, whether you have a collection partner now or if you’d like a collection vendor through us at ABC, now is the time to consider placing them sooner rather than later. Get yourself into the creditor line because if bankruptcy is imminent, you want to be already at the line and at the table trying to get some portion of the cash perhaps before they file if there is that possibility without any preferences being breached in any way. There are some things you’ve got to be much more proactive and get in the creditor line for payment.

We’re getting emails that some of our clients are looking to reopen their doors early in June 2020, others are in July 2020. We have to remember this and I think all of your customers know it. When the governors say, “We’re reopening for business tomorrow or next month,” it doesn’t mean that the Dow is going back up and everyone will have their cash and everything will be better. We’re going to see a lag in the timeframe for money to start flowing again into industries. While we’re all looking forward to that time of reopening, it might be another 3 or 4 months before the reopening translates into the money circle starting to flow a little bit stronger.

It’s a matter of now being proactive instead of reactive when it’s happening. When you’re finding people going out of business, they’re going in bankruptcy, not enacting then to talk to you and talk to service but to do it sooner rather than later.

If they’re selling overseas, internationally, they’re having it tougher in Europe than we are in many respects, not just the effects of COVID but to their industry as well. There’s no misunderstanding when it comes to the European payment terms. They expect longer terms as it is. They will take advantage of it and string it all out a little bit further. You’d like to think that maybe they’re a little bit more chill than we are in the US and they would joke about that with us that we’re too high strung. We’re high strung for a reason. If you’re selling overseas into Europe or other markets, be extra diligent.

TAP 10 | Debt Collection

Debt Collection: If a bankruptcy is imminent, you want to be already at the line and at the table trying to get some portion of the cash before they file.


I’d like to be high strung when it comes to cashflow. No disrespect to our friends in Europe but I’d like to be a little more high-strung when it comes to that.

We always tell everyone, “You don’t want to spend money on a collection fee and how does that work?” Just so your customers understand it if they don’t use a service, everything that we do at ABC is on a contingent basis. There isn’t some fee that you pay as you go on a third-party collection. If we don’t recover, we don’t earn a fee. The misnomer of our industry is that everybody thinks when everybody needs a collection service in a day and age like now, that we’re getting rich or we’re rolling in the Dow. We are not because the money is not out there to recover for our clients. Our best times are also the best times for the economy. We’re driven by that as well. We’re not getting rich in these days. You’ve got to get in line to get recoveries and we’re encouraging everybody to do that.

Maybe talk about if I’m a business that’s never used a service like yours, how do I get started?

It’s as simple as a phone call or email to us. We’ll go through as we’re doing here on a Zoom call perhaps to introduce and discuss our services and make sure that you completely understand the process. It’s as simple as getting a copy of an invoice and some background data information. If you have a signed credit application, great. Some companies do that, others don’t. If you don’t have a signed credit application, now might be the time to start thinking about signing your credit application or a policy of some sort. With a few basic documents and real contact information, you can set us loose. We have what we offer to some customers. If it’s not too far past due, there’s a ten-day free final demand period where we’ll send out correspondence to your customer indicating that we’d been engaged on their behalf to recover the money and that we require that they make all arrangements to pay within the next ten days.

If they don’t pay, so be it. We understand and we know where it’s going. If they’re old accounts, let’s call them a debtor now instead of a customer, it gives them ten more days to hide, to run, to put their money someplace else. If it’s fresher, that’s where the ten days might give enough of an impetus to them to make that payment. From there, if they pay in those ten days, there’s no charge to you. After the ten days, we will ratchet up our collection efforts much more, whether it’s phone calls and emails, however we can get ahold of those debtors and find out what the real issues are. We’re going to do it with sensitivity because we know that there’s COVID out there. We are monitoring and we’ve developed our in-house systems where we have specific non-payment reasons that we’re tracking due to COVID-19.

We’re advising all of our clients as they’re placing accounts, “Here are the ten accounts that we’ve worked out payment plans. Here’s another ten that they need better terms because of COVID, and here’s those that claim they can’t pay due to COVID.” We’re coming back to our clients because we don’t ever want to be a bad reflection on you or have any PR. We’re going to talk with you and say, “What would you like us to do? Is there some way you want us to handle it?” You might tell us that client sings the blues on cash a lot. COVID doesn’t matter, take this approach, but we’re going to make sure that we do it the way you feel is necessary. We use our common sense, but we will never accept a settlement of any lower amount without our client’s prior approval on that. Nothing ever goes to suit.

There are three phases to the collection. The first is our in-house collection efforts. That’s where all of our collectors based in Buffalo and other parts of the country. They’ll do all the calls and emails and so on. There might come a point where we don’t think we’re going to get any traction. These debtors perhaps are not going to come to the table unless there’s some legal threat per se. At that time, we will then send the account to an attorney in the local jurisdiction of that debtor. They will then start to ping them with phone calls, emails and so on. They might even be down the Main Street from their office. They may know each other from the Rotary Club or what have you. There’s a lot of strength in that.

Given that times are tough, it is prudent to consider extending payments. Click To Tweet

From there, if the attorney is not successful in securing payment through their amicable efforts, the third and final step, if it makes sense, would be a legal suit. At that time, we will go back to our client and say, “Here’s the situation. Let’s say the debtor’s business is still open, the lights are on, the trucks are in and out every day. The amount of the debt is X number of dollars and we think it makes sense to pursue legal suit.” At that point, then it’s the client’s call, “Yes, we want to do it or no, we don’t.” There are legal filing fees that you have to pay in order to get a suit started. Some clients don’t want to put more money toward it and others they want to because they feel it’s worth the risk. We’ll guide them along. From there, we’ll quarterback everything through the attorney for the suit and handle the documentation. Take that off your hands and keep you abreast of what’s happening.

You guys also record all of your conversations. If you have someone saying, “The collections person got rough with me or wasn’t professional or anything like that,” is there a way to go back and check it?

That’s a great point, Brian. Thanks for bringing it up. There’s no hiding in a recording. Every call that we make from our collectors is recorded. We also have a great quality assurance process in place with our quality team. Their job each day is to listen and hear phone calls. They have checklists. All of our collectors are monitored and they’re scored. Each month they go through and discuss what the report card was for the month. We watch it closely. This isn’t rocket science collections, but we try to make it rocket science because this is our bread and butter. This is what we do and we have to be good, professional and ethical at it. Each call is recorded and if ever one of our client’s customers calls and says, “That collection firm that you unleashed on me, they were rude and they were abusive and so on.”

It’s as simple as a phone call to one of us at ABC or an email saying, “I received a complaint. Can you please obtain the recording of that phone call and send it over?” I will tell you that 9.9 times out of 10, our collectors are there to do a job. We’re professional and ethical, but it doesn’t mean that we are going to be their best friends. If a debtor wants to give excuses, our collectors are more interested in resolutions, trying to find a way to work it out. What are the real issues of nonpayment? They’re going to cut to the chase and sometimes people may take that as being rude. We’re just trying to get results for our clients in recovering. All their calls are recorded and available. You can hear them firsthand and from there, make that decision.

We also have a software. It’s intuitive AI software. We always hear about AI these days. When the recording is occurring, the software picks up on certain words that a collector might mention or when the debtor mentions it. Keywords like bankruptcy or attorney or anything that might be perceived as not ethical, that’s immediately highlighted. Our quality team is then alerted to it that this call happened and these keywords were covered that perhaps you should look into. From there, those calls are listened to and to make sure that it was used in the proper forum. If it wasn’t appropriate, our collector will be reviewed on it and notified of where they can make some improvements.

It shows why you have made it to your 90th anniversary.

It’s a milestone. There are many firms in our industry that give the industry a bad reputation. There are firms like us where we’re devoted to providing education to our clients, making you better as an organization, providing you with free webinars and free newsletter. We’re not the pushy, salesy type where when you sign up for our newsletter, we’re going to ping you every day from there on to try to get your business. We’d rather do the small things correctly to help make your job a little easier. When the time comes that you do need the collection service, we hope that you’d think of us because we’re trying to do it with integrity and responsibility.

TAP 10 | Debt Collection

Debt Collection: While we’re all looking forward to that time of reopening, it might be another three or four months before the money circles start to flow a little bit stronger.


I’m glad you mentioned that because I wanted to point out that your website has a ton of resources on it. That’s ABC-Amega.com. People can go on there and check out the education center that you have and look more into the company before they contact you.

There’s no contract to sign, no long-term commitment of any sort. Mostly our clients insist on a written agreement for collections that spells out all of our T&Cs, Terms and Conditions, but it’s not a requirement that we have. We realize each and every day that we have to earn our stripes. Just because we have 91 years of history, that doesn’t make us the greatest thing since sliced bread. Tomorrow is another day and we have to again perform. If we don’t perform again, we don’t get paid. It’s all about that. We’re willing to help. We have credit application examples. If there’s a language that certain clients or new companies are looking to enhance. Here’s another tip, it’s leverage. If your credit application, which hopefully you’re having it signed so it’s binding, has to go to a collection matter, the collection expenses, attorney’s fees and past due interest will also be charged. That’s extra leverage but you’d be surprised when many clients or customers realized that they’re on the hook, we’re going to offset the expense that you would pay for collections by recovering those extra dollars.

Domenic, thank you very much. I appreciate your time.

Brian, we appreciate the time too. Best of luck to JGS for the great work that you do. To all your customers, everyone, stay safe and also continued success.

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