The Last Word Comment


When two worlds collide


Sales and credit have often had a prickly relationship, but that does not always need to be the case if everyone puts the firm’s interests first


Chris Wells Group credit manager, Denmaur Independent Papers cwells@denmaur.com


I expect, when you started to read this, that you had visions of being invited into the dark world of astronomy: no chance! For my article, I am talking here of those other two worlds: sales and credit control.


Varying closeness Over the years, and in several companies, I have experienced varying degrees of success in the closeness of the sales-credit control relationship. Obviously, the accomplished credit manager will be doing everything in their power to improve the relationship. When the two are in accordance, the


whole process is humming. Inevitably this will not always be the case, and, when the two worlds collide, there is bound to be some fall out. If my memory serves me well, I can recall


an incident where a salesperson (who shall remain nameless) argued his corner quite vociferously about why he had to concede both on price and credit terms – that is to say, if he reduced the price and promised extended terms, he would secure the sale. I am sure you also have had to deal with this type of thing, but read on. When challenged on what led him to that


decision, he trotted out the usual story of: “I had to offer a competitive price to be able to hook them from our competitor. The competitor also gives them 90 days end of month, so I had to do the same.” My reply was simply: no you did not!


A good selling price You will often hear this story from the least productive sales rep, who is just trying to cover his position, however I reminded him that there are four parts to a sale.


50 www.CCRMagazine.co.uk There are, of course, the two aspects that


I have already alluded to, but, in addition, there are quality and service. It is a combination of these four elements


that constitutes a good selling price and terms that are advantageous to both parties to the transaction. The credit terms, or price, may not match


competitor’s (although, hopefully they are close) but what would encourage a potential customer to purchase from you is the quality of the product. For example it may be a niche product,


you may manufacture a product which has little or no competition or is second to none with the incidence of defects or returns being low. On the subject of service, I mean deliver


on time, in full and will submit prompt and accurate invoicing. With a good quality product, credits


should be few and far between. However if, on the rare occasion, there


is a query, then we will get it resolved immediately or get straight back to the customer with the reasons why it is not possible to issue a credit. In other words, deliver ‘on time, in full


and make query resolution a priority’. In some organisations, this can be a


very tough nut to crack, but you should stick with it. You should work to do your bit and, as


a result, those customers, who want to be partners for the future, will want to stay with you – even though you might be a little bit more costly and maybe trade on lower terms. Trust me: it does work and it really does depend on you! CCR


January 2017


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