There are several traditional ways to try to wrest payments from delinquent customers. Call them on the phone. Send them letters. Threaten to cut off their credit. Any one or a combination of these can be effective. However, there are also some other more innovative ways that can encourage timely payments in the first place so that the need for calls and letters will be reduced. Among them:

• Showing your appreciation to Accounts Payable. This is always one of the most hassled and underappreciated departments (or positions). They're under a lot of pressure, so we always show our appreciation what they do for us.

  At least twice a year, Thorpe sends customers' accounts payable people gift baskets--such as chocolate assortments, Mexican food assortments, and coffee/tea assortments. We also include a promotional item (e.g., a clock, schedule book, calculator, tape measure that has: "From the Mediacom Credit Department with thanks--We appreciate your business" printed on it. After they've eaten everything in the basket, they still have a permanent reminder of us.

  Editor's Note: This article originally appeared in the Credit & Collection Manager's Letter, which Credit Today purchased in 2006.

  How do accounts payable people respond? If a customer's check-signing manager is only in the office for 30 minutes, the accounts payable person usually makes sure that Mediacom's check is near the top of the pile to be signed. And if a customer's executive tells Accounts Payable that it can only pay $50,000 that day (because of cash-flow issues), again, the Accounts Payable person will make sure that Mediacom's check is part of that $50,000.

  The result is that DSO has improved significantly since we started this program. In fact, many accounts payable people now take the time to call us each time Mediacom's check is ready. This allows us to have our courier pick it up for us, instead of the customer placing it in the mail, where it can take three to five days to reach us.

• Meeting for lunch. While the topics of conversation can vary, one point we always cover is: "What can we do to help you--to make paying your bills easier?" Often, we're able to rearrange our billing system to better match customers' systems. For example, we found that one ad agency preferred being billed by market rather than by date (i.e., geographic organization rather than chronological order). They explained that if we billed them by market, it would be easier for them to reconcile accounts, and they'd be able to pay us faster. Ever since we made this change for them, they've been paying us every month with no discrepancies."

• Accepting credit card payments from customers who wish to utilize this option. Not only do we get paid quicker, but customers have the luxury of being able to pay off the amount over time to the credit card company, and they also benefit from any perks that the card might offer, such as free air miles.

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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