Good Collectors are Super Sellers

Sales people persuade their customers to buy their products. Credit people persuade the customers to pay for the products they bought. Good persuasion skills are characteristic of both sales and credit / collection personnel. A good sales person is persistent, doggedly pursuing the potential customer until he buys. A good collector is the proverbial squeaky wheel who gets the grease. Persistence is another key component of both credit and sales. Sales people regularly negotiate sales deals and credit people regularly negotiate payment terms, schedules and settlements. Add negotiation skills to the list of critical characteristics of both sales and credit professionals.

It has been said that a very good sales person will convince a customer to purchase something he had not originally intended to buy. It can also be said that a good collector can get the debtor to pay more than he originally intended; the 60 and 30 day amounts for example. Effective sales and credit people are very much alike, contrary to the commonly held belief that they are opposites.

Yet, I have never met a sales person who claims to be a good collector. It is a job they usually loathe. However, obtaining payment is the final act of any sale and it is the reason for the sale in the first place. Therefore, given the similarities in the tools and characteristics, good collectors are actually, above average sales people. Yet companies are reluctant to compensate collectors on a similar scale. The logic is, sales people are revenue providers and credit departments are cost centers. Yet, if a good collector or a good collection team were to significantly increase the level of collections would that not be a providing revenue?

Businesses tend to focus more on past due amounts than the entire accounts receivable. If, though, the level of collections were to increase, the company could rely less on their lenders for immediate cash.

This is where CreditPowers comes in. We can analyze your current collection trends and if they are less than par, we can make the recommendations that will increase the collection levels. We can train the collection staff in strategic collection procedures and we can follow up to make sure they are on track.

For more information, e-mail us at patrickpowers@sbcglobal.net

Learning the tricks of the trade

A collection agency I know recently received an $80,000 claim from a building material client. The agency charges 20% of the amount they collect. The client had supplied material to a public works project. They had filed the necessary preliminary notice. They had even filed a Stop Notice. But they did not know what to do next so they assigned the claim to the collection agency. The collection agency sent a letter to the general contractor’s bonding company and soon thereafter they received a check for the entire $80,000. The agency made $16,000.

The building material company did almost everything right. With a little more training they could have sent their own letter to the bonding company and saved themselves $16,000. Where do credit departments get a little more training? There are an abundance of collection seminars but they require leaving the office, usually for the day, and they cover a lot of material, not all of it new or relevant, and there never seems to be enough time for questions. Webinars are all the rage, but they are topic specific and there are no opportunities for questions. This assumes that the credit personnel recognize they could use a little more training. Maybe, the building material supplier assumed the next step was assigning it to a third party.

That’s where CreditPowers comes in. We are not a collection agency. We are a credit management resource. We can identify those areas in a credit department that would benefit from a little more education and we can train your personnel in those specific areas. We can do in-house training customized to the needs of the department. It would be money better spent than letting someone else write collection letters.

For more information, contact us at patrickpowers@sbcglobal.net.

Strategic Credit Solutions

There was once a home center business with ten stores in the Western United States that decided to offer credit to their contractor customers. After a year, the home center management was scratching their heads and wondering why the receivables were turning so slowly. The beleaguered credit manager was buried with past due accounts and had no time to figure out the problem. Management called upon a consultant to have a look see and he found in short order that the company was not mailing invoices to their customers.

Sometimes, as with this situation, the collection and credit group is so busy trying to stop leaks in the dam that they are unable to step back and find the root of the problem. That’s where CreditPowers comes in. We can analyze the credit performance and root out the issues. We can make recommendations that will put the receivables on tract, improve productivity and increase efficiency.

CreditPowers has over thirty years of credit experience in a wide range of sales environments, from the conservative to the aggressive. We offer an affordable program that begins with a performance evaluation of your current accounts receivable situation. We can make recommendations that will get your department on tract and we can train the staff on sure fire methods that will achieve results. Finally, we can be a resource for information and services to enhance performance.

For more information e-mail us at patrickpowers@sbcglobal.net