Magazine article Business Credit

Getting out the Old Tool Box

Magazine article Business Credit

Getting out the Old Tool Box

Article excerpt

We have all attended seminars guaranteed to increase our efficiency in collections. While we may leave these courses with a high level of enthusiasm, we are usually disappointed later with the results or lack thereof.

Why is this so? I have found that it is often not the fault of the course or seminar, but rather our use of the tools presented.

My father had a big tool box. Although it contained many pieces of equipment, he never used all of them on any one job. He studied the situation and decided which tools would achieve the best results.

Learning from my father, I have found that this same principle applies to the field of credit management. Here are some collection ideas and techniques that I use. Some, all, or none may work for you. But no matter which you find helpful, put them all in your mental tool box; you never know when they might be the right "wrench" for the "nut" you're faced with.

Get To Know Your Customer Base

Determine your company's account mix. Identify time and staffing constraints and know your system's limitations. The greatest idea will not work if you don't have the time or people to put it into action.

Send Customer Statements Regularly

Review each statement for problems, always looking for ways to "enhance" it. If your system has the capability to print messages on statements, take advantage of it. Use stickers or other "eye catchers;" even something as simple as a stamp noting your membership in NACM can be effective.

Take Advantage of Form Letters

If you use form letters, design and personalize the letters yourself. It is also important to change them periodically. Do not let the letters become stale. Unless your customer base is extremely large, you have no reason forr not doing this.

The Block, The Sieve, and The Early Bird

Set aside "blocks" of time for phone calls several days each week. One or two hours should be adequate. Work on accounts which are not already in your follow-up system. These concentrated blocks of time should enable you to go through your portfolio of receivables three times per month.

Along with the blocks of time, use a "sieve." Each time you go through your portfolio, work on progressively smaller and smaller accounts. Many problems can be solved by applying a small amount of attention. …

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