Hi. My name is Adam Stewart, Debt Collection Expert and owner of ADC Legal Litigation Lawyers.
Your credit team must work in well with your sales team and vice versa. This is given, but how do you make this happen?
Firstly, a credit policy must be clearly defined to reduce misunderstandings and improve communications between the sales department and the credit department, especially as it relates to sales involvement in debt collection. Participation, by the credit department, in sales meetings is a good start to building a good relationship. Some benefits are:
- Managing risk
- Resolving disputes
- Collecting past due balances
- Dealing with customers.
One of the goals of the credit department is to help their company make the sale safely, meaning making the sale with a reasonable assurance of payment. If the customer does not pay, the sales people will not get their commission, so the sales department has a vested interest to work with the credit department to work together.
Another bonus of working together is to find ways to approve orders. For example, a credit manager may be able to suggest a financing method not previously considered by the customer or may be helpful in locating sources of capital for a customer.
Both teams will also need to work together in resolving customer disputes. Even if the dispute is product or service related, the credit team may be able to help by offering a discount, for instance.
Finally, it is good for both the debt collection team and the sales team to get together and work out the marketing risk of a potential customer, as apposed to the credit risk.
The credit department must communicate the risks to sales and management while guarding the confidentiality of the customer. This aspect of confidentiality extends to credit information that may be obtained in connection with industry credit group meetings. The sales department needs to communicate the full marketing potential of a customer, especially if they present as a poor risk financially.
For instance, the sales staff may know that obtaining the business of a particular customer is important to a company’s distribution plans, to developing a new market, or for maximizing shipping efficiency, for example. If the sales staff can explain this importance to the credit staff, a more informed credit decision will result that combines both credit information and sales strategy.
Courtesy and communication can help the credit and sales teams to reconcile their differing missions for the good of the company. By cooperating, they work together to get more customers and make the existing customers happy.
ADC Legal Litigation Lawyers is a legal practice specialising in commercial advice and litigation, debt recovery and insurance claims recovery disputes. For more information, email us at email@adclegal.com.au or call 1300 799 820. Talk to us about your litigation or dispute concerns via Skype at adclegal.