Teaming Up With Sales For Collections
"We do a lot of custom work, and we don't get a lot of money up front." A formula for collection disasters? Not at this company where a credit savvy and collection-motivated sales force keeps delinquencies and bad debts well below the industry average. "We don't have the traditional conflict between Credit and Sales," notes Cynthia Delli Quadri, who, as accounting department manager, heads up credit and collections for Graphic Center, a Sacramento, Calif., high-end commercial printer. "Top management, our sales manager, and I work very closely." Just how closely these managers have to work together is indicated by the unusual amount of credit authority conferred on the sales reps. "They're responsible for how the job goes through the plant and also on the credit and collection end," she says. "They're accountable on their commissions, and they're responsible for providing assistance if I need their help in clearing up a misunderstanding. It can't be just one party working on something. It takes teamwork." This Credit-Sales teamwork is built through . . . Orientation of new reps. Newcomers to the 15-member sales force get detailed information on the team approach, the importance of selling to the right customers, the credit application, credit procedures, keeping the credit department informed on what is happening with customers in the field, and what their responsibilities are on credit-related matters. New-account credit arrangements. "We allow a variety of payment methods, and experienced reps know which is appropriate in specific situations," she says. "But I work with new reps to help them become more knowledgeable in this area," she adds. "For example, with magazine startups, knowledgeable sales reps know a magazine will have to collect on subscriptions in order to pay us. They know we have to get money up front for our hard costs, and they sell accordingly. New reps may not know this, so I work with them, or I work with the customer directly." Customer visits. Sales reps know they are responsible for using customer visits for more than selling. They are expected to watch for any signs that the customer's business may be "on the downslide." These include major changes in personnel or moving from high-end offices to more modest facilities. Reps are responsible for reporting these changes to Delli Quadri. Collections. Except for one salesperson who handles house accounts on a salary basis, all reps are paid on commission. New reps receive a salary until they develop a client base. Then they are paid a draw against commission like the other reps. Since commissions are paid only on paid invoices, the incentive to assist on collections is strong. "It keeps us all on the same page and ensures that we have the same goal--to collect," says Delli Quadri. "Because sales reps are in the field and have more contact with customers, if they're comfortable with collecting, that works out fine. If they don't want to get involved with collecting--or if there is some collection issue--I deal with it. If I need to go out and talk directly with the customer, I do that." Information gathering. Especially when a new customer's references are inadequate, the information sales reps are able to gather is invaluable. For example, the customer may have listed a small or quick copy printer as a reference on the credit application. These printers may well have handled projects for the customer, but these projects are unlikely to have been in the same dollar range as the credit the customer is requesting from Graphic Center. Or the customer may be changing printers because they cannot pay the previous printer. In these situations, Delli Quadri asks the sales rep to find out what printers have done projects for the customer. "Reps at other companies may sometimes be tempted to keep customers' unfavorable financial information from the credit department just to make a sale," she says. "But at Graphic Center, keeping Credit informed is a stated sales rep responsibility. They're supposed to be selling to very responsible people. We do a lot of custom work, and we don't get a lot of money up front. That's why we have to make sure we're not going out on a limb. Our goal is to make a sale and make it work." Assuring customer satisfaction. "Since satisfied customers are more likely to make timely payments, sales reps assist in collecting simply by making sure that customers get what they need," she says. "We offer customers several opportunities to view a project before it gets to the next phase. So any changes can be made according to customer needs." Resolving disputes. If customers are not satisfied with the finished product, they usually call the sales rep, who then takes care of any problems. Should a customer still be dissatisfied with the outcome, the entire team gets involved with resolving the issue. Editor's note: The above article originally appeared in the "Credit & Collection Manager's Letter," which Credit Today acquired.
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