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Internal Credit Control - Collection in Person

If all else fails and if it is practical, the final step is to arrange a personal interview with the customer. 

Personal interviews are the strongest demand for payment. The interviewer must show authority and positive ability to negotiate the claim, if necessary. At this time, the customer must pay, show valid proof of a dispute or be completely honest in stating their financial position. 

A collection interview requires business-like persistence, firmness, tact and an impersonal attitude.

Aids Needed on Collection Visits
Try to get the customer to come to your office. If it is necessary for you to go to see them, you may need these items:

• A copy of the customer’s ledger. 
• Copies of invoices involved. 
• An envelope addressed to you. 
• Copies of correspondence. 

Basic steps in a personal interview are the same as on the telephone. You should confirm all information on your application form and make sure it is up to date. 

Then, you should determine the problem. Once again, it will be one of three things: a lack of funds or a belief that there is lack of funds, a dispute or a refusal to pay. 

If it is a refusal, you have no choice but to place the account with your collection service. If it is a dispute, once again you can immediately decide whether it is a bona fide dispute or an imaginary one and take the necessary steps to resolve it. 

Disputes, valid or invalid, are handled in the same manner as in the telephone interview. 

Finally, when you have found a solution, if it is not a payment in full, put the arrangement in writing.

Salespeople as Collectors
Using salespeople as collectors is a subject which occasionally arises when the credit department completes its automatic procedures and when the company policy is heavily sales oriented. 

The sales management theory is that the salespeople know their customer and, therefore, can ask them for the past-due money. The theory may be valid, but in practice, it is not usually successful. In fact, it may be very costly. 

Consider these factors:

• The good salesperson has been trained to sell their company’s goods and services, and is not trained for collection work. 
• The poor salesperson may have been a source of the delinquency because of promises made in order to get the sale. 
• Time spent on collection of an account may detract from time allotted for selling. 
• The credit department must set a follow-up system to watch for the salesperson’s reports. 
• Adjustment of the account should be the responsibility of a salesperson’s supervisor in consultation with the credit department. 
• There may be a 30- to 45-day additional delay before more positive action can be taken by the credit department. 
• There may be inter-departmental resentment. The salesperson is being asked to do a credit department job, and this should not be their responsibility. 

In summary, there are some exceptional salespeople who can sell and collect accounts. Usually, the combined duty is not a good policy because of delay, cost and resentment.

Key Word for Collection - Speed
Whatever the method of collection, the key word is "speed." The sooner contact is made with the debtor, the sooner the money will be forthcoming or the sooner you will know that outside assistance is needed.

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