In a previous blog post, I suggested using salespeople in the debt collection process. More specifically, I said that salespeople could use their close working relationships with customers to convince them to more quickly retire past due balances. The feedback that I received was not entirely favorable.
Several people suggested that it was never a good idea to involve salespeople in the collection process. I disagree. While I definitely do not believe that salespeople should be allowed to negotiate extended payment plans with delinquent customers, I think salespeople can play a very useful role. How? By using their personal relationships combined with their knowledge of the internal workings of the debtor company to bring additional pressure to bear on the right person or department. One technique I have seen work effectively is for the salesperson to bypass A/P and finance entirely and go directly to the Purchasing department. Even if the salesperson does not get a commitment for an immediate payment, they often get additional information or insights about the problems the debtor is facing that can be used by the credit function to decide on the best course of action.
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.