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Square Peg, Round Hole

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.

Michael Dennis, MBA, CBF, LCM

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.

5 Responses to “Square Peg, Round Hole – Michael Dennis, CBF”

  1. Dorothy Siegel says:

    So, based on these comments I was your best collector. It is nice to find out after all these years that I was so highly regarded by you 🙂

    Regards,

    Dorothy

  2. David V. says:

    I agree Michael. There are some larger accounts where their Accounts Payable department prefer not to receive any phone contact. They require that you submit a claim form and give them a specific number of days to follow-up. Yet there are other customer accounts that need a more personal touch, which is where it is best to place the collector that does well at building good relationships.

  3. Margaret Spencer says:

    So, assign your best and brightest to the toughest customers. What is surprising is learning that not every creditor company operates this way. Not only were my best collectors assigned to my most difficult accounts, i also asked them to mentor / advise/ train the other collectors on how to be or become more effective. My theory was that they used certain techniques and tools to become more effective and efficient as collectors, and I was right. The best collectors don’t re-invent the wheel. They have a handful of tools they use regularly, depending on the situation, to get to the heart of the collection problem.

  4. Karen Buckingham says:

    Hi Michael,

    What you suggest is really a good idea if you have more than one collector. If there is only one collector (which is the case here), that collector has no choice but to deal with the good, the bad and the ugly 🙁

    The only relief I get is if the company President calls the debtor himself and he normally does so only if he has a special or personal relationship with the debtor.

  5. Michael Dennis says:

    Dorothy

    You always knew you were the best collector I have worked with — certainly better than me.

    Karen, I don’t know what to suggest. It is a tough situation.

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