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A sales rep told me that as a rule, collectors call the wrong people when asking for money. A routine collection call is usually made to the accounts payable clerk employed by the debtor company. This is okay, as far as it goes. An accounts payable clerk processes the billing. Therefore, if you want to know if your invoices are being processed, the payable clerk should be able to tell you. Much of the time learning that your invoices are in process is a good indication that they will be paid sometime in the future. If the company has a regular payment schedule for payment, a processed invoice will be paid according to the debtor’s processing schedule. So much collection activity is spent verifying a known and familiar process. This is not collections. It is only information gathering and unless the collectors are doing some major revenue forecasting, it is useless information except collectors are often asked by someone, when payment is expected from the customer.

A typical collection call is triggered when invoices are past due. Then the collector confirms that payment is in process and is told when the invoices will be paid. Or the collector is told that some or all of the invoices are not in process, for whatever reason, they are lost in the mail, sent to the wrong address, sent without postage or simply on the wrong payable desk. Upon learning of this dilemma, the collector dutifully resends the invoices and waits a sufficient time for them to get into the payable process.

Of course, there is also the possibility that the accounts payable clerk waits for the collector to call before finalizing the payment process.

In all of these situations, the collector is at the mercy of the accounts payable clerk. That is a lot of power given to a clerk; particularly when the clerk has no other authority but to process the invoices. All a payable clerk is supposed to do is receive the invoices, ascertain there is the required back up; signed delivery receipts, purchase orders and whatever additional documentation the debtor company requires from its vendors as a condition of payment.

Arguably, contacting the payables clerk as the first step in the collection process allows the debtor to delay payment. The debtor is always in control of the process and is setting the payment terms. At some point in time, when payment is not received, the collector calls the same clerk repeatedly, only to be told it is out of the payables hands and in the hands of someone authorized to issue payment. That’s when the collector moves up the next level.

So why not just start with that level?

Perhaps, every collection call should be directed to that person who signed the credit application and the corresponding personal guarantee. That person is on the hook. That is the person who agreed to the terms and conditions, promising to pay on time and make collection calls unnecessary. Call that person directly, he or she had the authority to sign the application and has the authority to sign checks. Everyone else is a gatekeeper, preventing you from getting a commitment. Let this person find out for you how the process is going and when payment will be made. It’ll save you a lot of steps, put you in control and since this person does not want to be put on the spot, may even begin to make payments on time.

Next time, I’ll discuss how to get the person on top to take your calls.

This is where Strategic Credit Management Solutions can help. We know the process and we can train your collectors to bring in the cash. See our website http://powerscredit.com/. Your comments are welcome. Send us an e-mail at patrickpowers@sbcglobal.net.