Credit and Collections Department as a Nerve Center

How can one become aware of the complications indirectly associated with credit and collections such as shipment or delivery errors, unacceptable product performance, quality control problems, etc., that can cause a client to withhold timely payments? Firstly, you will need to identify the real issue and that all potential payment problems should be routed to the Credit and Collections department at once. Every company needs to develop the Credit and Collections department as a nerve center yet it doesn’t have to be an elaborate undertaking. Let me share with you an example of a simple action plan below.

You can assign each client to an account service specialist where a simple variation of the 80/20 rule can be followed–80% of the money are typically generated by 20% of the customers and these customers should be assigned to the highly experienced Credit and Collections staff–the remaining 20% of the money attributable to the other 80% of the customers should be assigned to the less seasoned staff.

All complaints should be routed to the appropriate account service specialist–it is only important to do so in order for him or her to be aware of any potential payment problem. The specialist will them assess the importance of each complaint and projects any related payment lag. This in turn can be acted upon right at once by informing the customer, under the circumstances, that he or they are expected to meet the payment terms outlined on the current billing statement.

All complaints should be rerouted to the appropriate department–the specialist will then need to assign the complaint to a secondary department (i.e. delivery problems are forwarded to the shipping department) and logs an anticipated problem-resolution date. The specialist will then need to follow up to ensure that the problem is indeed resolved and that collection efforts can resume on schedule.

I hope that these tips are helpful to you.