ithout loosing customers

How much time you can give him depends on his answers to your questions, 'oWhy?" and "How?" It also depends on:

(1) the amount of money he owes you, o'Hout can you pay?" is the next question you ask your past due customer. Notice that "how" continues to show that you are interested in his problem and want to keep him as a customer.

(2) your past experience with him, -(3) an analysis of the situation to determine whetler his proposed plan is workable, and (a) sound judgment as to the efiect on your cash flow.

Keep in mind also that you, even if your finances would permit it, should not assume the customer's burden to too great an extent. If you do, he may lose respect for himself and you.

In fact, it is a good idea to get up-todate information be{ore you ask the customer why he has not paid you. A current credit report from a reliable credit reporting agency lets you know, for example, whether the customer is behind in paying other companies or only your company.

When you know the reason why your customer has not paid, you have a better understanding of: (t) his situation, and (2) his future ability to pay. You have also gained his confidence because you have shown him that you want to help him solve his problem-that of restoring his credit with your company.

Most embarrassed debtors have 'thought a great deal about their financial difrcul. ties. In fact, your customer-when he's the kind you want to keep-has probably lost sleep worrying about how to pay you.

By the time you go to talk with him, he may have worked out a partial solution for paying you but not a good enough one. He is still embarrassed and worried.

When you ask about your customer's plans for paying, you show additional in. terest.in him and gain his goodwill. You have also gotten information which will be helpful a little later. When he tells you "when" he will pay, information about his plan helps you to judge whether you can rely on his word or whether he is making a promise which you both know he cannot keep.

"When can you pay?" is the question for which your other questions have laid the groundwork. Wit}r tlose questions, you showed interest in the customer's problem; you got information about how he plans to pay you; and you indibated that you want to help him so he can con. tinue to buy from your company.

Your customer has been expecting you to ask when he will pay up. But because of the manner in which you worked up to the question, you have kept a friendly and pleasant relationship with him.

Some owner-managers feel that such an approach coddles the delinquent debtor. Their attitude is: o'I(Ihen a man knows just how far leniency will go, he will find a way to pay." Perhaps so, but these business owners fail to realize tlat they, themselves, would prefer a friendly and pleasant approach by their creditors.

Such business owners would pay the creditor who, without warning started a harrassing and threatening collection procedure. But chances are they would probably stop doing business with him. A patient and understanding approach is not coddling when it helps keep the debtorwho needs your product-on your company's list of active accounts.

But even soo bear in mind that some delinquent accounts may not be collectible even with proper handling. Soriretimes the customer simply does not have the capacity to pay, and you may have to write him ofi as a bad debt. Your goal in extending credit is to try to keep such possibilities as Iow as possible.

HOW CAN WE HETP?

The help which you can ofier your past due customer depends on his situation and on yours. Both of you have problems, and sometimes your own problems may be complicated by the nature of your customeros difrcultv.

As you handle each case on its own merits, keep in mind that other than money, the most important element to an embarrassed debtor is time. He needs time to solve his financial problems.

One way to help a past due customer to keep his respect is to insist that he try to show good faith by giving you *-" iypu of payment almost immediately. Installment notes ofier one way for the past due customer to get back on his feet. You space them so he can pay them and still have cash enough left to keep his business operating. In some cases, you may want to go with him to see what help his bank can offer.

Sometimes, the customer may be delinquent with several companieq and the problem is: Who gets paid first? One way to solve it is by calling in the other creditors, with the debtor's permission, for a frank discussion with the goal of working out arrangements to help the debtor pay everyone while staying in business. If the number of other creditors is large, a working committee can be selected to handle the details.

Your aim is helping the customer re. cover so that he can do two things: (l) pay what he already owes you, and (2) continue to buy from you.

Sometimes such buying may be on a re. duced scale until he gets back on his feet. Or it may be for cash.

Because of his embarrassment at owins youo he may be making small cash purchases from other companies. Insist that he do this cash business with vou. With his help, work out a figure whith he can add to his cash order. With such an installment plan, he can pay ofi his old indebtedness.

,Such an arrangement helps you to keep your past due customer's goodwill. It keeps him as a customer-a loyal custoss1-fgssuse you have helped him to re pay his debt and regain his pride. When a customer does not respond-and a lew 14rss'1-1e the help you try to give him, you will be better ofi without his good. will. In such instances, the collection of delinquent receivables is more important than the customer's goodwill.

Conctusion Of Two Part Series

Low-income housing market means profits

qEVEN new house plans have now been u added to the program. Three were secured from northern California dealer Homer Hayward of Homer T. HaYward Lumber Co., currently buiding Sec' 235 homes and having funds reserved by the FHA for future projects. The four other designs came from the Small Homes Council, Building Research Council of the University of lllinois.

Sfory of d Glqnce

Federal Gov't. upped Sec. 235 fund commitments in July NLBMDA package plans let dealers compete with mobile homes in this sometimes tricky market.

All of the ten plans offered meet FHA minimum property requirements. Featuring modular outside dimensionso standard window and door sizes, and single-skin exterior siding, the houses can be built using the conventional method or with components (including fabrication of the bath or kitchen as core units). Several of these plans, in fact, can be built in sections and trucked to t}e job site in two halves.

With the introduction of the new plans this year, three facliages are now available: The original package contains three sets of plans defined as RC-l, RC-2 and RC-3; Package 2A-Designs RC-4, RC-S and RC-6; and Package S/IC-Designs NRC-S, NRC-6, NRC-7, and NRC-8 and 9. Each o{ the designs offers basement and no-basement floor plans.

Following is a brief explanation of Section 235 provisions and procedures to follow for those interested in producing housing for sale to families qualifying for interest subsidies:

,YIARKET ASSESSAAENT

'fhe first thing which must be undertaken is an assessment of the potential market in the community for housing of the type which a qualifying family will be permitted to buy. Two things should be considered: (a) The upper income limits for qualifying families in the community, and (b) the upper price limits (technical' ly known as the maximum mortgage amounts) for houses which qualified families will be permitted to purchase.

INCOM;E Llrtills

An eligible family must have adjusted family income which does not exceed 135 percent of the income limit established for a family of the same size in the area for initial public housing occupancy. Upper income limits will vary from one community to another, with an average upper Iimit around $7,000. Local insuring offices of the FHA will be able to provide this information. A family in a community with an upper income limit of $7,000 may make as much as $7,600 and still qualify if it has two minor children living at home' Once the upper income limit for his community is known, a builder is placed in a better position to estimate the num' ber of families who might qualify for as' sistance under Section 235. As a general rule lower income limits average about $1,000.

Feasibitity Anaiysis

Homes {or which a qualifying family may receive assistance payments must be approved by the FHA. Thus, a builder in' terested in building houses under Section 235 must proceed as he would with respect to any other FHA approved project.

An additional step which is required in a Section 235 project is a request by the builder for a reservation of funds. Other' wise, the builder has no assurance that Section 235 assistance funds will be avail' able when he sells completed units to elig' ible families. No builder or seller can have outstanding at one time fund reservations in excess of the maximum assistance Pay' ment which could be authorized for 200 dwellings in any one project or contiguous project. In addition, funds will not be re' served for fewer than five units.

PRE.CONSTRUCTION EXHIBIIS

To obtain final FHA approval of his project, the builder must submit (1) a tract grading and drainage pla4, (2) street improvement plans (not required where local standards are acceptable to FHA)' and (3) a subdivision plat and covenants in final form. These plans are then re' viewed by the FHA.

Finai Approvat

Assuming final approval o{ the plans, the FHA will issue a Final Exhibit Ap' proval Letter and indicate a commitment o{ funds. Construction of the dwellings can then proceed with assurance that FHA mortgage insurance and Section 235 as' sistance payments will be available for qualifying purchasers.

A number of NLBMDA members, Pro' cessing Section 235 projects through the Federal Housing Administration and the Farmers Home Administration currently, report they are highly pleased with the program and the designs made available to them.

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Your

R) EVEILLE is lhe annual majol East f\ R"v event of Oakland Hoo-Fioo CIub S39, the 38th in its illustrious history and 90 golfers turned out at Castlemont Country Club near Pleasanton.

As the former Hearst country place had virttrally burned down, the evening events transfeired ro Oakland's Hotel Leamineton. More than 200 attended; some 70 companies sponsored the event.

Great credit goes to committee members Ralph Boshion, Al Mury, Bill Elledge,

Sfory dI d Glonce

Though long in the tooth, the Annual Reveille is never short on fun for participants . a favorite since 1932, the event drew more than 200 to dinner, and more than 90 played golf.

Vic Roth, Verlon McKinney, Dave Jopes, Jim Harrison. Dwight Curran. Gordon Saunders, Ilanuel Lavrador, and Pete Coronado.

Ralph Meyer, chairman of the golf committee, awarded first prize to Dick Strong for Iow net. Second prize to Rick Starr fol second low net. Low qross winner was Ken Harais. And Cran Ceissert relinquished the Club $39 trophy to Knute Weidman.

ngths up to 18'. Fine ined old growth timfrom our Yollalla Tree Farm.

Most Western RRs in Good Shope

Among the many repercussions of the Penn Central Railroad's recent t'ollapse into hankmptcy was the chain of questions triggert'd in this industrl about the shape of westt'rn railroads.

Unlike their eastern cousin-s. the western roads, Ior the mo-.t part. appear to be in far better shape to continue their traditional hand-in-glove rvorking arrangemcnt rvith the lumber indu-qtr).

In the expt'rt's almost unanimous opinion, lack of nct u'orking r,apital ( u htrt's left in the till after current liabilities ) rvas tht, major immediate factor in the Penn Central's financial crash.

This shortage o{ net working capital in the eastern railroad,. is not the casc u'ith most oI the lvcstern roads. For erample" the [-nion Pacifir, ended last 1'ear u'ith a po,sitive net working tapital of $52 million. While the t P is on sound finant:ial footing, it is like Penn Ccntral in that both are activt: in the real estatc busiNESS.

The Burlington Northt'rn. thc rt't't'nt merg('r lesult of llurlington & Quinc1', \orthern Pacifir' and the Slxrkane, Portland & Seattle, finished the yt.ar uith a creditablt' $25 million ir. net u'orking capital.

Final figures for last year's t-P rvith their second highcst income.

operating rt'sults also shorved tht: Year ever in both gross and net

Yqrd Feotured During Foir

Palm Avenue Lumber Co. and its ou'ner and manager. Parrl Fritt'hcy and his son Russ. n,ere featurt'd in a puhlication at'companving thc ret:ent Alhamlrra. Calif." industlial Fair '70.

Fourrded fi 7922^ the yard was bought by Fritchel. and ser,cral associates in 1939 and has alrvar-s bt:en a higlrly respet ted purl oI thr- loun's husint'ss communitr'.

lloth Fritchcys have been active in <'ivic affairs in additiorr to rurrnins onc of thc best yards in the area.

AFPC is Fighting Pollution

Amclican Forest Products Corp. r'eccutlv demoustratt'd t on<'ern for positile pollution control measures lrv knotking dorrn thc sawmill bulner at tht'ir Martell plant.

Removal of the burnt'r rva-q tht: most l'cc('rlt in a long list of improvements madt, bi AFPC to reduce pollution. AFPC has additionally shut down the bulnt'r at the operations' moulding plant.