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Cash connections

10th June 1993, Page 28
10th June 1993
Page 28
Page 28, 10th June 1993 — Cash connections
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Which of the following most accurately describes the problem?

Cash-flow is a major problem in companies large and small. Slow payers ( re the enemy— but you can fight them with the telephone and a well-trained telecollector—the right questions need to be asked to get the r ight answers. Use your telephone! On average it takes 80 days to settle an invoice in the UK, and the telephone is a powerful and active tool for debt collection compared to the passive use of invoices and statements.

1. Incentives work

Telecollectors should be educated and rewarded, so that they may act as diplomatic, customer aware, responsible, authoritative company representatives Don't tell your money chaser to "give them a call but don't upset anyone."

The telecollector must have thorough historical customer knowledge, familiarity with commercial and legal implications such as "cash flow problems", "ceased trading", "receivership" and what actually happens when legal action is threatened and taken.

2. Corporate business

Lack of business is a major problem, debt collection runs close behind. Small businesses prove to be the most reliable settlers of accounts with the Government, both central and local, running a close second. The priority of the telecollector must be to chase money in a ratio to the amounts of money owed—the largest to the smallest.

Chasing by alphabetical order or invoice date is not prudent. Comprehensive records are essential; keep a customer call sheet and have all information to hand before making the first call. The aim should be prompt payment without adverse damage to the business relationship.

3. Finding the decision maker Thorough research will have annihilated clerical error, postal problems and bank delays. Financial departments are cloaked in anonymity. Someone has to be responsible for the overdue payment, and the decision maker who handles the account is the one to contact.

4. Before dialling Make sure you know:

• The debtors correct name and status; • To whom you need to talk to make sure the account is paid; • The agreed terms and conditions of sale; • Details of any previous communications; • Date of late payments received; • Debtors previous payment record; • How are you going to respond to excuses?

5. Be persistent

The longer the payment delay, the higher the ladder of seniority to be climbed, remembering that personnel near the top are pressured, short on time and constantly hassled, usually about money. Emphasis should be put on benefits to be gained by the customer's company on immediate settlement, but no threats should be made.

6. Positive approach

The collector's voice should be alert and positive, the case stated firmly, the information factual and relevant This call should end with, "May I please have your confirmation that your cheque will be in the post today."

7. Delaying tactics

If the customer has to check the account, a time-scale with a degree of urgency must be agreed for the next call, and followed up promptly. Specific agreements and ensured deadlines must be completely understood on both sides, entered on the customer call sheet and, if necessary, confirmed by letter. Artful debtors skilfully exploit companies with a less than tight control and respond better to determined companies with a clearly defined payment policy.

8. Beware of skilful reasons for nonpayment: These include:

• There is a mistake on the invoice, our order and your invoice do not agree; • I was dissatisfied with the service; • Your invoice missed our computer run; • I will call you back after checking my files; • Funny, we have not received your invoice/ statement; • The cheque was sent last week, hasn't it arrived?

• There's a queue system here, we're getting through the invoices;

9. The cheque is in the post If you get this perennial answer, ask the following questions:

• When was the cheque sent?

• To what address?

• Which address was the cheque sent from?

• What is the date and the number of the cheque?

• What is the amount of the cheque?

• If it is not the full amount owing, why not?

10. Finn policy

In all dealings the telecollector must have company backing, be authoritative and confident that the customer has been treated firmly, and with care and astuteness. Commitment and promises of immediate action has to be gained from the debtor, and it must be made clear again that all verbal dealings are being documented. A dishonoured cheque is a serious breach of the relationship, action has to be taken unless payment is received immediately by courier, electronic winder or some other speedy way. A mutually agreed delivery plan must be agreed.

11. No time wasting

Positive agreement with exact arrangements for settlement signals the closure of the call. The business-like attitude must continue, dilly-dallying with niceties once success has been achieved spoils the impression that has been made, and could allow the debtor to talk himself out of his commitment. If the debtor agrees that your cheque will be ready on a definite date, the agreement can be finalised with, "Fine, have it ready and I'll pick it up at reception". This will sort out genuine account settlers. If the cheque is to be post-dated, clinch the agreement by saying, 'Please post it today and I will hold it until then before banking it". This makes the situation more real. If there is no positive feel in favour of the creditor, then further steps must be taken either via the County or High Courts and the debtor must he informed of these proposals.

12. Act immediately If the promised cheque does not arrive on the due date, act immediately. The established resolute behaviour must follow through in a decisive manner, or the previous process of determined telecollection will become null and void for any further dealings.

E by Natalie Wheatley

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