"Problems in an account are most likely to be found by the credit department, even though they were created by another department earlier in the transaction," points out one experienced credit manager we know. "That's why the credit department should have an elevated position in the company and should be specifically involved in customer service."

"Credit and collection people are well situated to find out quickly about potential problem situations, disputes about price, quality, or delivery before they get out of hand. This should be one of their major responsibilities.

"The faster you can find out what is happening, the more likely it is you can catch an error before payment is due, certainly before it's past due."

How can a collection manager modify the traditional role of his or her department while also eliminating collection problems and speeding up cash flow?

"One way is to call the customer monthly, weekly, or even every two days, not to ask for money, but just to stay in contact. The manager is now wearing the "customer service hat" rather than the "collection hat" and should say something like, I notice you made a large order, casually pointing out the amount. Is everything okay? Do our figures match?

"That way, if the customer says anything is wrong, you can promise to correct it and get in touch with the appropriate quality control person or sales rep. And if the bill is only 10 days old, instead of 80 or 100, the sales rep will almost certainly remember what was said.

"People appreciate this kind of attention, and giving it may well turn a disgruntled customer into a happy one, and make the customer say, Hey, these people really do care.

"It costs 15 times as much to get a new customer as to retain an existing one," he points out. "Therefore, these measures are extremely cost-effective."

He notes that credit and collection people can help cash flow by taking on added responsibilities. They can:

• Help to resolve disputes over price and delivery, as well as service, by identifying problems early in the game.

• Help to answer the question, "Is the problem in the customer's shop or in our shop?

• Produce numbers other departments can use to help manage their own customer service, including customer, dollar amount, and number type of product, region and salesperson.