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Frequently Asked Questions (FAQs)

How does your process work?

            A.  Merchant sends invoices to ABS, electronically, by fax or by mail.

                        1.  Invoices are scanned and filed.

            B.  Invoices entered into data processing system.

                        1.  Reserve Amount calculated and transferred to Reserve Account.

                        2.  Service Fee calculated and withheld from advance.

            C.  Confirmation emailed or faxed confirming acceptance of invoice – following

                  morning after invoice is posted. Merchant receives report that calculates the                              amount of funds to be deposited, service fees and reserve.

            D.  Funds for invoice ordered and forwarded to Merchant.  Funds delivered to

                  merchant in 2-3 business days electronically.

            E.  Statement is produced once per month and mailed (preferably emailed) to each                         customer with an open balance.

                        1.  Merchant Name appears on Statement.

                        2.  Payments made payable in Merchant Name, but managed and collected by                                  ABS.

                        3.  Merchant receives report of all payments posted (email or fax).

            F.  Each time there is customer activity, either a payment or a new invoice, a

                 transaction report is sent to merchant. 


Does ABS actively manage the accounts receivables?

            Yes we will manage and monitor your receivables.        

            A.  Each Merchant is assigned to a Primary Account Representative.

            B.  Phone calls to customers generally begin at 60 days past due.

            C.  Once a month, Account Representative will contact Merchant and review the

                  status of Aging Report.  Discussion will be held with Account

                  Representative on past due accounts.

            D.  ABS provides the following services.

                        1.  Phone calls to Customers.  No hard collection calls.  We simply ask

                            when the payment will be made.

                        2.  One follow-up letter will be sent if no response is made to phone calls.


What kind of reports do you send so that I can keep track of all of our transactions with ABS?

            A.  Aged Receivables Report – List of customers with balances.

            B.  Posted Settlement Report – Invoices – Lists the total dollar amount of invoices.                           settled, the service fee amount, and the amount deposited in the reserve account.

            C.  Posted Payments Report – List of customer payments.


What are your customer payment terms?

            A.  Net 25 -  most common - has 25 days from date of statement.

            B.  Net 55 -  has 55 days from date of statement.

            C  Revolving Terms – minimum 20% payment required.

            D.  Fixed Payment  -  minimum 10% of balance required.


How do you apply customer payments?

            A.  Auto Apply – computer applies to interest first, then to oldest invoice.

            B.  Manual Apply – applied to invoice specified by customer after interest is paid.

            C.  Payments always applied to interest first unless specified by merchant.


Do you charge our customers a finance charge or late fee if they don’t make their payments on time?

            A.  Yes, if we don’t receive a payment within the payment terms your customers                              will receive a 1.75% monthly finance charge (21% APR) on the aged balance.

            B.  The minimum finance charge is $2.00.


Do our customers have to be charged a finance charge if they pay late?

            No, if the merchant doesn’t want their customers to pay a finance charge, the service              fee that is    billed to the merchant will be increased to cover the added cost.


How do you calculate the service fee that you will charge?

           The service fee is primarily based on a combination of the:

  1. Financial strength of the merchant

  2. Volume of receivables

  3. Average $ amount of invoices


Is their recourse back to the merchant if a customer doesn’t pay?

            Yes, customer accounts that are not paid will be charged back to the merchant.

            Accounts that are 90+ days past due are subject to chargeback to the Merchant.

            Merchants will be notified of these accounts and can elect to chargeback the account              or continue to extend credit terms to the account. Chargeback amount will be the                    remaining balance on the account, including any unpaid, accrued finance charges.


Do you require a lien on my property in order to use your services?

            No, but we do file a UCC on your receivables. We also setup a reserve account that is              pledged as collateral and is also maintained to offset uncollectable accounts.


What is the reserve account?

            A.  The Reserve is used as collateral and is also maintained to offset uncollectable                         accounts, and/or unpaid finance charges.

            B.  Minimum Reserve is equal to or larger than 100 % of  >90 day accounts, plus

                 10% of remaining balances.

            C.  10% withheld from initial batch of invoices, depending on aging of initial


            D.  Generally, 1% is held as ongoing reserve from each invoice – This can be

                  increased if necessary if account becomes under reserved.  Merchant is

                  notified when this happens.

            D.  Reserve funds held in individual FDIC insured account at Astra Bank.  Monthly                           reserve account statement provided by Astra Bank.


What are my customer’s payment options?

            There are several ways that your customers can pay their account:

            1.  Personal Check sent to our lockbox in Ellinwood, KS

            2.  Credit Card over the phone or online – a convenience fee of 4% is added.

            3.  ACH Electronic Debit over the phone or online with authorization from                                        customer – no fee.

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