CREDIT CORNER

Salespersons’ Role in Credit

 

Increases in bad debt and losses in recent years require that more attention be paid to delinquent accounts. The ideal situation is avoidance of slow paying accounts, or bad debt losses. However, today's pressures for sales, and increased volume demand that the credit person look to their salespeople as additional sources for factual credit information.

 

The approach is one whereby the salesperson is not perceived as an expert credit analyst. Rather, the salesperson is a significant member of the firm, providing valuable credit information to their company. Thus, the solution is a management team approach based on some practical steps toward achieving a mutual understanding as to the company's credit policies and procedures.

 

The salesperson's standing with his/her company is judged in part not only by their total sales or general efficiency, but by the profit derived from such sales. Salespeople, often being the only representatives of his/her company to ever see the customer personally can provide critical and pivotal data. Thus, credit executives must look to their salespeople for dependable credit information.

 

Management or its credit executive should help to educate the company's salespeople in the field of credit, handling it tactfully. It is virtually important the salespeople understand the credit policy of the company. Such a program will help build good credit relations and greater sales. Salespeople, aware of how to service accounts properly, can keep avenues open for reorders with larger credit limits.

 

Salespeople, when they are aware that their customers are past due, issuing bad checks, or they suspect financial difficulties can also be helpful in reducing bad debt losses. This information should immediately be reported to the credit department. The credit executive then makes his own investigation and determines further collection action.

 

If outside professional assistance is needed, collection costs can still be kept down to a minimum by the use of MSCCM Free Demand Service. If payment does not result, MSCCM will make personal contact with the customer and in most instances, collect the account before the debtor's circumstances worsen.

 

Each year, our files and experience reveal collections made on behalf of creditors, whose salespeople alerted the credit department to problem accounts that in the months following developed into complete insolvencies.

 

Procrastination and delay in the placement of delinquent accounts can result in no financial recovery. A letter received by a credit executive from one of his salespeople stated: "This party has no property, either real or personal. No prospects either present or future. No hope, either here or hereafter."