As a consultant, I often find that clients had assigned their most experienced collectors or their best collectors to their largest customer accounts. There is a widely-held theory was that the larger the customer account and balance due, the more experienced the collector should be.
In my opinion, regardless of the size of the credit limit or A/R balance, customer accounts should be assigned to a creditor company’s collectors based on their complexity. In other words, the best or most experienced collectors should be assigned to accounts that require their experience and expertise, irrespective of the size of the credit limit or the balance due. There are several risks associated with assigning your best collector to your biggest accounts, including these:
- Your best collectors are not handling the accounts that need their expertise the most
- Therefore, the effectiveness of your collection efforts are not optimized
- In a best case scenario, disputes take longer to resolve and payments take longer to collect
- In a worse case scenario, the debtor uses the collector’s inexperience or ineffectiveness to delay issuing payment
- In a worst case scenario, money owed to your company that could have been collected relatively easily and fairly quickly by a more experienced collector is either not paid at all or is seriously delinquent before it is ever paid by the debtor
The solution is to assign your best and brightest to the accounts most difficult to collect from, irrespective of the size of the balance due.
That’s my opinion. What’s yours?
Michael Dennis’ Covering Credit Commentary. Michael’s website is www.coveringcredit.com.
The opinions presented are those of the author. The opinions and recommendations do not necessarily reflect the views of CMA, or their Officers and Directors. Readers are encouraged to evaluate any suggestions or recommendations made, and accept and adopt only those concepts that make sense to them.