Using Salespeople in the Debt Collection Process

Coffee Is For Sales "Collectors"

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.

Michael Dennis, MBA, CBF, LCM

That’s my opinion.  What’s yours?

Michael Dennis’ Covering Credit Commentary. Michael’s website is

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.

33 Replies to “Using Salespeople in the Debt Collection Process”

  1. I totally agree. We do not intend to put the full burden of collecting on the salesperson’s shoulders but their close relationship with the buyer does present a unique opportunity to get things resolved quickly. I have seen situations clear up time after time after the salesperson got involved.

    1. Wow…….. amazing the AP dept will use the “tools”, sales people, to garner their big picture of account as to why they are late in payment, but they never take the big picture that sales provides as to why to EXTEND credit ! oh, no, do not go there!

  2. Our credit department has actually had some success in involving the sales people in the collection process. We provide a monthly summary aging to each salesperson showing their customers. This helps generate communication with credit. Sales management is also in involved in the collection effort. They are kept in the loop on significant collection matters and asked for feedback when specific accounts are in jeopardy of having their credit priveledges revoked, significant increases in credit limits etc. Salesmen are generally asked for pertinent information they might have on a customers business before we ever ask them to physically visit an account regarding delinquincies.

  3. I agree with your comment completely. I request assistance from my sales force to help resolve or expedite a payment frequently. They are requested to contact Purchasing (not A/P) to help resolve a payment problem. In many cases the delay is an issue that only the Purchasing Dept can resolve and/or approve. I rarely get any resistance from them to assist.

  4. I completely agree with your comment. There are times when customers would rather have a comfortable conversation with their sales rep than a conversation with the financial/credit personnel. They are more apt to give up why they are slowing than have to make up lies or excuses on why they cannot pay.

  5. Yes, sales people can sometimes be tools. (pun intended) But they can also be helpful. While I would never ask them to become involved in the collections process directly – they can be a good source of information about the customer and, on occasion, I’ve asked them to maybe “mention” to their buyer that there are some accounting issues that need to be resolved and could they please have their accounting people contact our accounting people. That’s about as much involvement as they should have in the process. We need them to be out there selling – not doing collections stuff.

    1. I have been doing sales now for 14 years and we ARE a good source of information on who to contact in order to get paid but DO NOT ask us to collect. It take weeks, months or even years to build a strong, long lasting relationship with the customer and you do not want to jepordize that. That salesperson is likely the main reason you are doing business with that customer to begin with. Rarely is any company the sole provider of a particular product or service and there are others out there fighting daily for that customers business. My idea as a salesperson is to appear as almost an employee to that customer, or trusted advisor for what I have to offer my customer. I will often mention that I was informed their account was put on hold and that if I can be of any help for them to please let me know. This lets the customer know you are interested in helping them get the issue resolved. I agree that to “mention” is about as far as sales people ought to go. The salesperson IS the one with the relationship with the customer and should be used to resolve conflicts or billing discrepencies between the two companies. If you put the salesperson in the role of collecting money that gets over 30, 60 , 90 days or whenever…, the salesperson starts to become a bill collector in the eyes of the customer. This starts to put the “wall up” that the salesperson has had to overcome in the beginning to gain the trust of the customer. At this point the salesperson is not as welcomed during the visits with the customer because the customer is not knowing what to possibly expect for that visit/ call.

  6. In my company the inside sales reps (customer service reps) hold the primary responsiblilty for initiating collection activity. Thought process is that it’s more effective to ask about payment of past due while they are trying to place an order for more product! If the amounts really start to age then the outside rep is brought into the mix & ultimately the credit manager. It might not work for everyone in every industry but it works fairly well for us.

  7. I use my sales force to assist in collections when needed. They are not out to do my job but as it’s been mentioned, they have insights that I may not have. They don’t want their customers to be put on c.o.d. so therefore they are more than willing to help out. They still need to wear their sales hats and keep the repoire that is needed in sales. Because we deal with many mom and pop shops, my sales reps have direct contact with the owners so it makes it somewhat easier in those instances. I am in constant touch with my sales force so there are never any surprises. Our sales team also receives an aging of their customer accounts. So, now, Michael, you do have a few favorable reviews.

  8. Our sales staff received there commission once the invoice is paid. If the accounts gets passed 40 days. There commission takes a hit based on the invoice due date 1%.. This motives ours sales rep in helping with the collection process.

  9. I seem to be the lone dissenter here. Most of my customers are small mom and pop businesses, with whom our sales people have taken years to cultivate a strong relationship. I really try not to put a sales people in the position of collecting money while at the same time trying to sell goods. Anyone who’s been in credit for any amount of time knows how fragile customer relationships can be. Salesmen generally aren’t committed to the idea of collecting and therefore may not put forth the effort needed and quite frankly aren’t very good at it. If someone has to be the “bad guy” I’d rather it be credit. Having said that there are times when a salesman must get involved, when it’s a “he said she said” scenario such as those times when a customer claims the salesman quoted a lower price or sold goods on special terms. As I said most of our customers are small businesses; we are generally dealing with owners who take credit personally and of course have a different perspective then an A/P clerk may have at a big box retailer.

  10. We leave it up to the salesperson to decide whether or not to get involved in helping get past due balances collected.

    Did I mentioned that their variable compensation (commission) is paid based on collected sales not on invoiced sales? Not surprisingly, our sales team is anxious to help get past due balances paid as soon as possible… and prefer customers to discount whenever possible.

    Food for thought.

  11. I agree that utizing sales’ customer relationships can be a great benefit in credit management. I always notify and keep our inside sales team updated on customers I’m having credit issues with and ask for their input or of any”inside” information the customer may not want to disclose to credit, but will discuss with the sales rep. It is often the sales rep who will encourage the customer to provide the additional information required to raise their customer’s credit limit. Working together with our sales team, I am are often able to resolve a late payment issue by offering other term options to help that customer better manage their cash flow and continue to generate sales for our company. I also notify sales of credit limit increases for their accounts and leads to follow up on. By the same token, sales will contact me if they receive information that raises a red flag of a credit concern.

  12. Ordinarily, our salesreps are not allowed to be involved in collection. However, we do utilize their services to assist us in collection when customers are avoiding calls or having issues that require the salesrep’s presence in resolving them, so payment can be released. . Salesreps are out there to primarily sell and serve their customers and make keen observations as well. They do report to the credit and collection department any thing that may raise for concern. To this extent, I certainly favor the use of our salesforce to help us in collection from time to time..

  13. Sales earns and coddles relationships. Accounts receivable collects. Never mix the two or you simply weaken both sides!
    If you’re having troubles collecting, get a third party involved. Even if you ultimately wish to continue doing business with that customer a good third party will help you get paid while ensuring the relationship is not harmed…

  14. Our sales management team is very supportive of our collection efforts. Credit provides the sales reps with updates on the payment status of their customers. They can be a very good source of information for what is going on within the company and encourage the customer to work with us for payment. We do want to be careful, however, so as not to jeopardize the sales relationship they have with their customers. Communication is teh key going both ways between sales and credit.

  15. Chuck,

    Thank you for your comments. I respectfuly disagree if you are referring to a third party collection agency. Will collection agencies help you get paid. Sure. Will they do so and I am quoting you here “while ensuring the relationship is not harmed.” I think not. How could involving a third party collectioin agency NOT harm the business relationship.

    If by chance you were referring to some other third party, please let us know who that third party would be.

    Thanks and best regards

    Michael Dennis

  16. Hi.

    I hate to agree with Michael 🙂 but my experience with customers placed for collection is anything but the scenarie described by Chuck.

    Not surprisingly to me, whether I have placed “mom and pop” coompanies or individual (consumer) debtors for collection, doing so has always damaged the business relationship beyond repair.

    However, I am an optomist. I still hope that one day I will get a thank you card from a debtor I had to place for collection.

  17. I want to clarify my previous comment: If you are more concerned about maintaining a business relationship than collecting a past due balance then DO NOT use a third party collection agency.

    If you are more concerned about collecting the past due balance than you are about maintaining a business relationship with the debtor, DO USE a third party collection agency after your internal collection efforts have failed.


  18. I would say it depends heavily on who the sale rep is – their personality and business acumen are important. My collectors have the responsibility to collect, they have guidelines when they “should” and also when they “must” involve the rep in the process. Reps have access to the agings and can “choose” to help with the process.

    Some of our reps are proactive but not very effective, others are clueless or want to distance themselves as far from the money side of the business as possible, some have the skill set to intercede and keep the cycle moving. Our collectors know first hand which reps are truly helpful and who is more of a hinderance to the process.

  19. Hi Michael,

    I agree 100% with you on sales involvement in the collection process. But this does not mean that they have to be always in the process. When they are needed, we need to involve them. If the process of collection does not require their participation, then we do not invoke the option; we preserve them for the right moment.

    In debt collection we have several lines of defense, and sales is a key line of defense. It would be myopic to say that they are not needed. There will be moments that their relationship with the customer will come to bear. Sales’ involvement could have a leverage effect in the collection process.

  20. Eddy,

    I agree… and once again I find myself wishing I had thought of looking at the issue from the perspective you offered in your comments. Thank you.

  21. I support the idea to have sales person get involved in debt collection if the he feels comfortable with it, but it is never a good idea to depend completely on the sales person because it is going to harm this relationship with the customer. The company I work for puts the burden of collection completely on the sales team, and even deduct the bonus from the sales team to offset the bad debt.

  22. I have long been an advocate for the separation of the two. However, there are instances where the salesperson’s relationship and knowledge of the customer’s business aid the collection process. We must be careful however, to avoid a greater dependence on the salesperson as it relates to same.

    The salesperson should be focused on driving revenue and gaining a greater understanding of their competitors and the differences that exist between them. The minute we are unable to manage the balance of sales vs debt collection by the sales team, it will be the equivalent to asking the salesperson to slay Goliath and then bury him.

  23. I liked what you said about salespeople being able to play a useful role in debt collection. I had never considered the personal relationships they may have can bring additional pressure to bear on the right department. What you said about a salesperson going to a different but related department to get insights into the situation was very interesting.

  24. If the customer amountt is 100% bed debts and the company says this amount deduct from salespeople salar.
    Please tell me its legaly ok. Salespeople paid amount against the customer.


  25. The personal relationship the sales people have with the company’s customers help them build the resilient focus on the business so the sales person can do well in collection of those debts from the customers basing on the customers explanations about problems they face instead of involving the Agency which can harshly collect the debts hence killing the trust the customers had for the company.

  26. When the company had it’s own debtors and creditors on site it worked like clockwork.Then corporate retrenched everyone and ‘moved’ admin to head office.
    It’s a absolute disaster, it’s now the sole responsibility of the sales rep to collect overdues with a completely dysfunctional debtors department, the overdue went from 3 million to 15 million and it’s the reps fault? It must be kept separate until over 60 days, then the rep can take a position to assist.

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