In Focus Commercial Credit
difficult to turn around. However ‘backlog’ in terms of anti-collection tactic can be a good way of stalling or trying to build empathy with the collector. Another classic stalling tactic is changing
bank accounts or systems. I will not name the major company, but suspiciously every December for three years it changed systems in the run up to year end. For best collection practice, challenge timescales and find out what arrangements have been made to get petty-cash cheques signed in such absences.
On stop When placing accounts on stop, it is often assumed that this will ensure a payment is made to resume supplies, but this only really works where you have a monopoly or unique product. Quite often, a dim view is taken by the customer’s operations and purchase ledger team. Where stop is enacted, it engages the
hardest anti-collection tactic of switching suppliers to maintain supply. A half-way house is calling with a payment promise to release the stop; this might not necessarily be the immediate payment the supplier has hoped for.
December 2017
When placing accounts on stop, it is often assumed that this will ensure a payment is made to resume supplies, but this only really works where you have a monopoly or unique product
Threatening of stop is useful, but standard
letters need to be followed up with real communication, otherwise there is a genuine risk of losing the customer. Communication is the key to effective
relationships and blind correspondence, such as letters and e-mails, have their place, but can cause damage as we have seen through stopping supplies and loss of approved- supplier status. Threats of legal action or final notices are now also being flagged up within larger
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companies. A new tactic I found last year when dealing with a major construction company was that following a final notice being issued, our managing director and commercial director were threatened with removal of approved supplier status. This was followed by a motivational-chat
telephone call from their senior buyer to myself and the conversation only turned round when he realised that we were not a small company that could be bullied, but part of a larger group. This is the true anti-collection tactic,
very best designed to stop standard collection tactics.
Conclusion It is harsh, but true, that credit control has become over reliant on letters and e-mails, and needs to get back to basics to ensure that there is still a telephone call directed at the correct point of contact. It is also, unfortunately, true that credit
controllers not asking the right questions, and are forgetting to pin down payment dates, which helps the client to sit on payments. So, refreshing the collection skills for every team member is always recommended. CCR
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