Collection Benchmarking Survey, Part 2 - Primary Collection Challenges or Obstacles
Question: What are the primary challenges or obstacles you face, both internal and external, in your collection efforts? More than anything else, our survey participants cited the economy as their greatest challenge. As a consequence, working with customers has also become more of a challenge, and that raises the specter of alignment with sales and communications in general. Effectively utilizing automation and staff resources were also frequently cited as key challenges along with achieving performance goals. And on a more philosophical level, human nature and the rule of law were also noted. It's the Economy Stupid
"Of course, the external challenge is the economy. Internally the challenge is posting customer payments accurately and soon as possible."
- Margret Goodson, Credit Manager, Affiliated Foods, Inc. "The slowing economy is causing more previously good paying customers to pay slower than normal. We hear they are not getting the bank support they once had or their customers are paying them slower sometimes due to the same reason. We are under more pressure from sales to work with these customers to continue to facilitate sales yet we still have to meet aggressive DSO goals."
- Douglas Swafford, Credit & Collections Manager, US Xpress, Inc "In the current economic environment very slow payments by our customers because their customers are not paying them."
- Thom Beaupre, CCE, Corporate Credit Manager, Metal One America "The economy has made it much tougher and being in the jewelry industry we were in a recession long before the rest of the country. I am a department of one filling the shoes of credit manager and collector. Too much for one poor soul to do."
- Eddie Keough, Customer Credit Administrator, Hoover & Strong "We don't face too many internal challenges; all management appears to be on board with our efforts. We are in building material distribution and our losses and DSO are up due to the housing depression. We are starting to see some sunshine and are not interested in taking risks considering the failure rate of our customers over the last several years. Our current challenge appears centered around the verification of funding on jobs; still with this effort in place we are seeing bank failures impact our customers ability to obtain credit."
- Dan O'Neill, CCE, Corporate Director of Credit, Stock Building Supply "Our industry is in a troubled economy, customers delaying purchases due to upcoming environmental changes with added slowdown due to the present global financial conditions."
- Dale Gerschutz, Manager, Haldex Credit Services Corporation "The economy, weather, longer delays with financing."
- Brent Ingersoll, Credit Manager, Black Diamond "Economy, which has hit the construction industry."
- Barbara Condit, CCE, Credit Manger, SPS Companies "Economy and customer cash flow."
- Kris Skupas, Corporate Credit Manager, Schreiber Foods, Inc. "The Economy, pressure from sales."
- Kirby Matlick, Director of Credit, Parts Depot, Inc Customer Terms, Promises and Workouts
"With the current economy, it is keeping a close watch and follow up on promises to pay. Also finding a payment arrangement that works for those companies now experiencing cash flow problems."
- Jeanne Sumner, Credit Manager, Willert Home Products Customers ceasing operations with little warning. Customer payments slowing due to economy. Customers having their credit lines pulled by their bank, therefore making it nearly impossible to stay in business."
- Tracey Skipp, Credit Manager, Krug Inc. "In the current economic environment, our greatest obstacle is being able to maintain existing terms and adherence to those terms. There is more pressure from customers demanding longer terms, and more pressure internally to release orders even if there are items beyond the agreed upon terms."
- Gordon Miller, General Credit Manager, ISP Technologies "In some cases, just making contact with a customer is a challenge."
- Melody C. Hogston, Credit and Collections Manger, Royal Mouldings "Large customers extending terms unilaterally."
- Ken Smith, Credit Manager, Schwartz & Benjamin "Customer's requiring ORIGINAL invoices, instead of the faxed copies or e-mails that have been just fine until the past 6 months or so...just customer's finding ways to stall payments."
- Christine Stanbrough, Credit Manager, Guntert Sales Division, Inc. Alignment with Sales
"Automation and aligning ourselves with the our sales team territories."
- Julie Osuna, AR Manager, Ossur Americas Inc. "Rogue sales force that make program commitments without executive management approval."
- Paul Setteducati, Corporate Credit Manager, Dual Corp. "Understanding that we are here to keep a good rapport with the customer and sales department, yet collect and help the sales dept at the same time...... Not always easy."
- Judy Bennett, Vice President - Credit, CCC Steel, Inc. "Being able to communicate the urgency of past due issued to the sales staff."
- Sam Yassine, Credit & Collections Manager, Otto Environmental Systems Effective Communications
"Communication disconnects with customers and sales, lack of clear communication."
- Patrick Spargur, Corporate Credit and Collections Manager, Bally Technologies
"Primary challenges are keeping updated contact information because of the job reductions and consolidations of departments with our customers. Deductions are always a problem because of a lack of communication from the customers advising why the deduction was taken."
- William Herring, Credit Manager, Air Routing Card Services LP "Communication is the number one challenge with dealers."
- Ben Duncan, Credit Supervisor, Outdoor Research "Non response from customers, lack of or incorrect contact information. Working with internal departments to educate their perspective and understanding of what we do along with building credibility."
- Sean Dowd, Credit and Collections Manager, Regency Lighting "Getting through to the correct people when trying to get a past due invoice collected."
- Michelle Morehead, Payroll/Credit and Collections, The Hamilton-Ryker Group Effective Automation
"How to utilize automation such as a preview dialer to increase output, yet manage to trouble shoot with customer to determine reason for non payment."
- Toni Dunlap, Manager Commercial A/R and Collections, Brinks Home Security "Time! Could use a more updated and productive A/R system."
- Randy Clark, Assistant Division Manager,/Credit, Young Electric Sign Company - Las Vegas "Follow-up capabilities. We don't have any automated way to mark follow-up calls. Still use calendars. We do have a collection screen, per customer, that has all credit information needed to make our calls, which facilitates that whole process."
- Joyce Werner, Credit Manager, BC USA, Inc. "Cannot email invoices directly off system, only fax. Hold code or Credit Limits may not stop an order from being shipped. Our company sells about 70% to Hospitals & Medical Centers. For the most part, they might pay slow, but not a lot of Bad Debt. The balance is Mechanicals, Plumbing etc. Which is much higher maintenance and risky."
- Catherine, Credit Manager, Ohio Medical "We are working towards paperless filing for all accounts where all credit documents are scanned and stored on online. Also working toward automated credit scoring."
- Steve Seko, Clipper Express Staff Effectiveness
"Limited staffing is our primary hindrance. Having limited staff to do collections, we would benefit from a more automated system to help relieve the cumbersome task of looking at multiple reports, notes and files before being able to make the call."
- Deb Andrews, Corporate Credit Manager, Imperial Nurseries, Inc. "Because of staff reductions, each credit manager is responsible for updating and analyzing their accounts, collections, deduction management and filing notices. The environment and past due percentages have also created more hands on contact with our customers."
- Rocky Thomas, CCE, VP Credit, CMH/Space Flooring Products, Inc. "Internally, it is the ability to work on those items that are collection problems in a timely manner. With an LLP, everyone is their own little business and it's difficult to actually have the (sales person/attorney) release control on the collection aspect. Externally, we are met with two significant challenges. In the legal 'industry' we are sometimes restricted in the ability to stop the bleeding before hemorrhaging."
- Daryl Lawson, Billing, Credit and Collections Manager, Squire Sanders & Dempsey LLP "Motivation and focus of staff and keeping them attuned to the big picture rather than the individual issues at hand."
- Tony Warfield, Director of Credit, D&H Distributing Meeting Performance Goals
"Keep DSO down and make monthly budget."
- Robert Armenia, National Credit Manager, Border Express "Managing high risk customers and maintaining our KPI's. Deductions have always posed a challenge for our consumer business with both internal (customer service) & external customers (big box stores)."
- Mark Larouche, Credit Manager, Bayer CropScience LP Order Accuracy, Finance and Human Nature
"At the beginning - that the order is entered correctly. That is by far the biggest issue we have."
- Bambi Fisher, Credit Manager, Lowry Holding Company "In addition to collection, also responsible for all financial aspects."
- Marcia Burgasser, Comptroller, American Douglas Metals "Our internal workings are fine. Externally? Human nature and an seemingly increased lack of accountability on the part of the small business operator or the workstaff of a large organization."
- Harris Semegram, Director of Credit, Prestige Brands Holdings, Inc. God Bless the USA
"Market does not have laws governing credit."
- Didymus Mangwarire, Credit Officer, Lion Assurance, Uganda
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