Don’t get stuck in the quicksand of old ideas. Break out and bring the cash in with radical ideas in collections and credit management.
Every business from utility companies andÂ medical providers, to retail and e-commerce operations needs some form of successful credit management infrastructure. You probably donâ€™t need to read another lengthy white paper on the importance of credit management and successful collections.Â Thatâ€™s why weâ€™re going to blog a short series on helpful credit management tips and perspectives with some radical twists to liven things up.
First, weâ€™ll take a look at the traditional perspectives on collections and credit management.Â Then weâ€™ll introduce some new thinkingâ€¦and thatâ€™s where youâ€™ll want to fasten your safety belt.Â Weâ€™re going to go for a ride in uncharted territory and redefine, realign, reassess, restrategize and revolutionize our thinking and actions when it comes to credit management and collections.
So here goesâ€¦
Part One:Â Traditional Perspectives
Credit Management has historically been isolated somewhere in the back corner of the finance department. Â Often buried even deeper, Collections has been hidden in the bac corner of the Credit Management area.Â Even when management understands the companyâ€™s reliance on successful collections to support cash flow, these areas are often ignored and left on their own to operate with little supervision and oversight.Â There are rarely any written policies, no documented procedures, no guidance.Â Only compliance with governmental rules and regulations seems to be observed.Â Are we protecting credit card information?Â Are we protecting customer data?Â We are?Â Okay. Â Weâ€™re done.
Typically we look at our receivables portfolio as part of the standard monthly accounting cycle close.Â And, we are looking backward â€” how did we do?Â What are our measurements â€” the most popular being DSO (Days Sales Outstanding)? Â And when the metrics arenâ€™t exactly what we want or need, we treat the outcome with the proverbial wave of a hand, â€śYeah.Â We gotta do something about that.Â Soon.â€ť
And then we wonder why our collections efforts fall short, why our cash flow is lagging behind last yearâ€™s and even last monthâ€™s figures.
Well, itâ€™s time we shine a light on those back-office recesses and bring those efforts into the spotlight.
Itâ€™s time to re-think the role Credit Management and Collections have in our organizations!
Itâ€™s time to be . . .uh. . .radical!Â Ready for Part Two? Here it is in all its radical glory: Radical Ideas in Credit Management and Collections Part 2
Sound TelecomÂ is a leading nationwide provider of Â telephone answering services, Â call centerÂ solutions andÂ unified communication systems. OurÂ friendly, courteous, and professional staffÂ represents your company the way you want it represented, with your messaging, your branding, and your mission.