Sales Reps Are not Collectors

An associate of mine recently took a credit manager’s position probably beneath his skill level and he is biding his time until something better comes along. Rather than utilize his experience and expertise, the company forces him to work within some very strict and inefficient policies and procedures. For example, towards the end of each day, sales reps enter orders for the following day. Often, the orders come up on credit hold, due to non payment. The sales force rants and raves, insisting that the orders be released but the credit manager’s hands are tied. The responsibility for calling the customers lies not with the credit department but with the sales reps. They did not make the calls, the customers did not pay, the account goes on hold and everybody starts screaming at the credit department.

I understand the logic. Companies that are sales driven do not want credit people calling customers, fearing they will irritate them. Rather, let the person who sold the product go after the money. If the sales rep wants a repeat sale, he’ll make sure the customer pays for the last order. While I have said before that the art of collections incorporate the same techniques as sales, it does not necessarily mean sales people are good collectors. They have other things to do, selling. Besides, the collections process is a full time job. Sales reps will always be measured on their total sales and never on their total collections. They may be dinged if a portion of their sales becomes delinquent or is written off later, but they will always try to stay ahead by making more sales, not by collecting more money.

By and large sales people do not want to ask the customer for money. They’ll procrastinate or make excuses for the customer and when they do call they go about it all wrong. The result: the customer has placed an order that credit will not release so a skirmish between sales and credit ensues.

My friend knows this system is wrong, inefficient and counter productive, but he is powerless to change it. The powers that be have spoken and rocking the boat is not an option. It is unfortunate. The company could use his talents to improve not only collections but the relationship between credit and sales as well. If allowed to, he could make things a whole lot better.

If management would let him, Strategic Credit Management Solutions could help. First, we could show management the error of their ways, convincingly and objectively. Second, we could provide some proven collection techniques and processes, help the credit manager implement them and soon, they’d have themselves an improved cash flow, a more streamlined order release system and a sales force free to do what they do best. See our website, http://powerscredit.com/, or e-mail us at patrickpowers@sbcglobal.net. Your comments are welcome.