Collections Insider

In many organizations the Sales Department and the Accounts Receivables Department / Collection Department are on opposites sides of the building. Rarely do these departments interact. In this article, I’ll focus on eight areas that can make them a combined team.

The Sales department is considered the front line while Accounts Receivables Department / Collection Department is the back end or “clean up” crew. The Sales Department and Accounts Receivables Department / Collections Department should, and can, work as a team.

We all know that the Sales person works really hard to sell its companies products by pounding the pavement or phones in an attempt to get the potential client to say yes to their product. Most sales are good ones; i.e. the customer orders the product, is satisfied with the product and pays for the product. A small majority of customers for various reasons do not pay, hence the need for a collection department.

When the account winds up in the Collection Department for collection, the collector has to work especially hard to collect payment for a product that has already been consumed or resold and the sales person has already earned their commission on the sale. The fact that it is now considered a “bad sale” can create tension amongst these two departments. The Sales person is confident they did their job and feel that now the collector should do their job, and vise versa.

Here are eight suggestions to help your sales team and collection team work together to keep both ends running smooth and to keep them both thinking about how they affect one another.

1. Get correct detailed billing information. Have Sales persons get complete contact and billing information from the customer, i.e. company’s legal name, billing and physical address, telephone, fax, e-mail and name of contact person.

2. Get a Purchase Order #. Get a PO# if a customer’s payables department requires a purchase order for each sale. Make sure the sales person obtains the PO# before product is shipped.

3. Look for warning signs. Sales person should be mindful of signs that customer may be having financial problems. All sales are not “good” sales, i.e. if the customer never pays it’s not really a sale is it?

4. Get a credit card #. Get credit card number to be kept on file for all purchases. This process ensures customers are paying as they go along and prevents delinquenices. Some companies offer discounts to “fast payers”.

5. Keep a blacklist. The Collection Department should provide a list of delinquent accounts to the Sales Team so that they are aware of who they should be cautious about selling to, i.e. a “Blacklist”. When sales persons visit or receive calls from customer to place further orders the sales person should remind customer that they still owe for a previous invoice and should they pay that first.

6. Share information. A quarterly joint meeting could be held with the Sales Department and Collection Department to keep the wheels running smoothly.

7. Don’t take things personal. Both Departments should be mindful that they are both under pressure to meet their financial goals and sometimes that means having to be a little tough to make that happen.

8. Don’t leave yourself hanging. Don’t extend credit to delinquent customers until they are caught up. Customers worth their salt will understand why this is good business. If they don’t they may not be worth hanging on to.

Reminding yourself regularly of the importance of each department in your company is key to a well run business. Happy selling and happy collecting!

About the author: Jan Conte is the President of Your Collection Solution, LLC, a debt collection agency out of Newtown, Pennsylvania. She has over twenty years experience in the debt collection industry. You can find more of her articles at yourcollectionsolution.com/blog/.

This entry was posted on Sunday, September 9th, 2007 at 4:15 pm and is filed under Debt Collection Tips and Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.