Is Your Business Prepared for Harassment & Discrimination Issues?
The year 2020 has universally slammed business owners into a new reality. Tried and true business processes are not delivering the same results as in the past, and savvy petroleum marketers are responding by taking a hard look at what needs to be adjusted to fit this new landscape.
For obvious reasons, the order to cash process is certainly under this microscope. A recent poll published by Credit Today reports 39% of credit managers feel their department efficiency has significantly deteriorated in the time frame between February – June, 2020. Effective leaders know it’s time to take action when departmental processes, that have been in place a long time, quit delivering expected results.
Collecting accounts receivable, and safeguarding company cash, is an effective place to start examining efficiencies. The best collectors start their day with a focus, blocking time, and using a top down approach to contacting accounts that bring the biggest impact to the company. They effectively manage collections in terms of people, processes and technology.
Consider the following prioritization:
- Customers that owe the most dollars, even if the account is just a few days past due. These top dollar accounts are the critical customers that need to contacted by phone, to understand the current situation and act as a true business partner offering resolutions that work for both sides. There should be a clear picture of the current health of this customer segment and what risks are possible going forward.
- Accounts that are on credit hold with possible pending orders should be in the immediate call cue. Without good communication and clear understanding of the situation there is a good possibility the holds should stay in place.
- Customers that have broken promises to pay are also in the hot category to contact, again by A failure to deliver what has been promised is a big red flag, and when not quickly corrected becomes permission to stay past due.
- Customers in sensitive aging buckets should be allocated for calling time, just not in the top priority level. In the past, these accounts might have been in a quicker to call priority because some collectors tend to gravitate to making customer calls they are comfortable with, without realizing they are not focusing on what is really the most important issue.
- Accounts that need to be considered for escalation. “Avoid Legal” letters, collection agencies, small claims court and attorneys are good possibilities for escalating a customer that is quickly becoming an increased credit risk.
While phone calls are the only way to truly understand the customer’s story, a secret weapon of effective collectors is proper use of technology working hard in the background. Automated advance notice of invoices due, and friendly reminder dunning letters that go out immediately when a customer misses an invoice payment takes a lot of work off credit staff. Most back office software systems offer a wide variety of help in the area of collections so make sure you’ve taking advantage of the technology help.
If the current climate has credit staff overwhelmed consider redeploying staff that might not be as busy. to help with initial customer contacts. These initial calls can be handled as customer friendly welfare checks, on how businesses are weathering the storm. Lead with empathy and listening skills, tell customers what you can vs. can’t do and be prepared to offer options to keep customers supplied with the fuel they need to keep their businesses afloat.
Questions about improving your credit and collections processes? Call me at 817-304-1533.
