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Our Subscribers Say...
I think Credit Today is fantastic. You cover many practical topics in the credit field that I use regularly. Just one recent example—a conversation on the ListServ about preferential payments—gave me tips that I used in an actual case. The specific information I picked up from this one discussion saved me $10,000, enough to cover my membership for many years!
- Steve Savino
Manager of Credit & Collections, ASSA Abloy Americas Division, New Haven, CT
Credit Today's Resource Directory and their online e-mail forum (ListServ) provide information on almost any credit-related topic you can think of. It is a great way to exchange information with other credit professionals. As the saying goes, "You don't know what you don't know."
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Credit Manager, Big Lots Stores, Inc., Wholesale Division
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"Being a part of the Credit Today online community is like having the expertise of hundreds of credit managers at your fingertips. These credit execs are willing to help you solve topical business issues as they arise. In the current environment of ever increasing competing priorities which reduce our opportunities to meet peers out of the office face-to-face, this is the most valuable tool you can have on your desktop! It's important that we have a mechanism to reach out to our counterparts quickly to exchange knowledge as well as to stay on top of industry trends."
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The Credit Today ListServ has become the pre-imminent online forum, providing an opportunity for discussion and comments (and occasional humor) from an impressive list of credit professionals."
David Dungan, Director of Credit
Justin Brands, Inc. (A Berkshire Hathaway company)
Fort Worth, Texas
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Ron Woods
Corporate Credit Manager-World Wide
Thales Navigation, Inc.
"The newsletter, coupled with the website and the ListServ, are to us, more valuable than any other credit publication, bar none. I try to use at least one article out of each newsletter for departmental training/discussion sessions."
D. Mark Constantine
Corporate Credit Mgr
Fulton Paper Company
"I love Credit Today and read every issue cover to cover. For me, the greatest perk of a subscription is ListServ. I believe Credit Today's ListServ members may be the most knowledgeable Credit brain trust in existence today. I have saved and categorized hundreds of contributions on a wide variety of topics which I refer to often. It's an easy and cost effective way to network and learn."
Doug M. Thomas
Kimberly-Clark Customer Financial Services |
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High-Risk Accounts and Purchase Agreements
With accounts that pose a potential risk, it is important to begin collection activity earlier than you might with other accounts.
Here are some of the signs of potential risk:
- Just at the time payment is due, the customer begins to complain about one or more problems--shipment mistake, shipment damage, computer problems, etc. Your investigation uncovers that there is no problem. The customer was merely stalling.
- The chief financial officer is replaced two or more times during a six-month period.
- Other companies begin inquiring about the customer's financial status.
- Your salespeople begin reporting information of a dubious nature on the customer that they have learned in the field.
If and when you begin to run into these kinds of situations with an account, it is important to take steps to ensure that you collect your receivables. Remind customers of your credit terms and call frequently to check that the order was received and that there was no problem with the order, and to remind customers of the payment due date.
If late payment persists, next time ask the customer to sign a purchase agreement that spells out price and terms.
A purchase agreement is an extended "purchase order" and/or a fully acknowledged bid/proposal. It can be open-ended and general, or it can be a very tight, signed, enforceable agreement.
Credit Today's Collection Resources Portal
The one-stop resource on collections: hire and train a collections staff, control slow paying customers, negotiation, speed payments by phone, make better collection calls, negotiate better deals, and manage collection agencies and collection litigation.
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Such an agreement can provide for benefits, offered by you, such as method of delivery, packaging, guarantees, and reorder prices.
Since purchase agreements affect the way the sales department sells to the customer, it is important to develop the agreement with the cooperation of the sales department.
In fact, a well-crafted purchase agreement can become an excellent closing tool for salespeople.
James T. Herst is president of Performance Source, Inc. (Highland Park, IL), a consulting firm and collection agency that specializes in credit and collection management and personal contacts by attorneys to recover slow-pay and delinquent accounts without customer alienation. Educated at the University of Southern California, Herst also serves as a consultant on cash-flow strategies. He writes, speaks, and holds regular group workshops on credit techniques.
www.performancesourceinc.com
(847) 831-5080
Editor's Note: The above article originally appeared in the Credit & Collection Manager's Letter, a newsletter purchased by Credit Today in 2006. This article originally appeared prior to 2000.
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Outlook 2012
This month's survey explores...
- What the top problems are facing credit execs currently, and
- What the top improvement initiatives are.
Click here to participate!
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