Should Sales Help in Collections?

by: Michael C. Dennis

This was the question asked in a poll sent recently to CMA members.   In my opinion, the answer to this question is:  It Depends.  If the question was:  “Can the sales department help the credit department in its collection efforts?” I would have answered absolutely.   It depends on the kind of help the sales department is providing.   I believe the following to be true about the role of the sales department in supporting the credit department’s collection efforts:

1. If sales is involved, their role must be clearly defined in advance and ideally in writing
2. Sales should not be given authority to negotiate any extended payment terms agreement on behalf of the credit department
3. In addition, the sales department should be told never make commitments on behalf of the credit department such as this:  “If you pay the past due balance this week, we will release the orders pending and then we can go back to business as usual.”
4. The primary role of the sales department should be to convince the customer that the collection problem is serious and requires the debtor company’s immediate attention
5. The sales department should be involved in opening a “second front”  meaning that the salesperson can use their close working relationship with purchasing to put pressure on the debtor company for payment while the credit department pressures the A/P or finance department for payment, and
6. If there are legitimate disputes, the salesperson can gather the relevant supporting documentation or put their right individuals in touch with each other.

    Michael C. Dennis is the author of several books including “Credit and Collection Handbook.”  He can be reached by e-mail at:  michaelcolindennis@gmail.com

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