Firing Up Collections

Recently, I was asked for ideas on incentives for a collection group. Apparently, the level of past due accounts was increasing and the company’s management was recognizing that money may help stimulate collections. I have seen bonus programs work before. A lumber company I know has a program whereby once a specific collection level is reached; the collectors are given a bonus for exceeding the minimum level. Since the collectors’ base pay is relatively low, the bonus is a critical piece of their compensation and indeed they are a motivated group.

Money is not always the only motivator. I once had a “Check of the Month” program. Each month I made a copy of a check that was received in the course of the previous month. It did not have to be the largest check, just one with the best collection story behind it. It may have been payment for a very past due and resistant account. It may have been the result of the resolution of a very complex dispute. Or, the collection circumstances made a good story. I had the check framed and presented to the collector responsible for its collection and it was displayed in their cubicle for the month. Every one of the collectors on my team was thrilled when they were presented with the framed check and they all worked hard to get one.

More recently, we had lunch brought in at the first part of a new month when our targets were met by the end of the previous month. The entire group worked very hard to hit those targets. As the group got closer to the targets and the end of the month drew near, the staff worked harder to make sure we succeeded.

Mostly, the chief incentive is recognition. If senior management recognizes that the collection effort is effective, that the team is making a difference and is making a contribution to the company, they will be motivated to work hard. All too often credit and collection departments are treated like a necessary evil and a drain on company resources. The credit department is one department the company would rather just do without. So any time it is recognized, the department is stimulated.

If you need some help motivating your credit department, contact CreditPowers today. We can provide an effective incentive program that the department will support and provide you with increased revenue as a result. We welcome your coments.

Contact us at patrickpowers@sbcglobal.net.