Among all the year-end tasks CFOs and collectors are juggling right now is trying to reconcile accounts due. There may be more pressure this year than ever with a recession and layoffs on the horizon.
Bottom line: How a company divides collection workloads may need an adjustment.
A recent survey by the National Association of Credit Management (NACM) asked credit & collection professionals how they assign workloads:
- 42% do it based on collectors’ skills, such as the ability to speak more than one language or to handle complicated relationships
- 29% assign accounts depending on the customers’ location, and
- 16% do it a certain number of customers to even out workloads fairly.
A tweak, not an overhaul, may be that’s needed
There’s no right way of doing it as long as benchmarks are met. (Benchmarks may be keeping days sales outstanding at or below the industry average, for example.)
When those benchmarks aren’t being set, a tweak may be all that’s needed rather than a radical shift in C&C strategy. Credit managers shared some of their ideas on a recent NACM “Extra Credit” podcast. Here are some things they’re doing differently to improve collections:
assigning one collector to one sales rep. This helps develop a rapport and helps get accounts collected sooner. The sales rep automatically knows who to go to for an extension of credit, for example, when handling a customer, and doesn’t waste time and effort to determine “whose account is this?”
accurately gauging collectors’ stressors. Managers need to know what’s overwhelming their staffers. Don’t assume it’s the number of accounts. By the same token, staffers need to know it’s on them to speak up and be honest about their current stumbling blocks. There may be a simple fix, such as switching a challenging account to another collector.
setting up automated payment reminders. Depending on how many small accounts a collections team is handling, automation helps reduce phone tag. Anecdotal evidence shows customers don’t like taking phone calls about debts any more than collectors making them.
