During a recent CoreXalance networking function held in Cape Town, Andre Louw, credit manager from Media 24 Magazines, spoke a bit about his experiences in the industry.
Years back Andre worked as regional credit manager for Bokomo. He remembers how different the credit relationship with clients was at that time and how much it has changed since then. "Work was done manually; we did not have any form of computerised systems at the time and everything was written on little pieces of paper."
He remembers how they worked purely on trust and how customers would say: "Don't phone me, I will pay on time." André recalls one Friday, when they had to collect money from a female customer who was well overdue. The sales representative accompanying him on the trip was such good friends with her that he walked up to her and kissed her hello. "After this friendly greeting, I was the one to have to tell her that I would need to hand her over as she did not pay her account."
On another occasion, he had to deal with customers from Lesotho who did not complete any credit application and no credit vetting was done before opening their account. Maize would be delivered four days after it was ordered, but only be paid three months later as the customers lived in the Maluti Mountains in Lesotho. "Precisely three months later, on a Friday, the customer would walk into my office carrying the cash in a bag. These people lived in shacks and here they were walking around with notes and coins to the value of R70K. This was how the customer preferred doing business! Service then did not stop at sales; we had to have this type of trust between us."
Nowadays things are much different. André mentioned how loyalty and trust are not what it used to be and that you have to be a person without personal feelings to survive these days. "I have always tried my best to build a trusting relationship with my customers; I remember one instance where I was instructed by my boss to hand someone over to the court for failing to pay his account. Instead of doing this, I went to the customer and asked him how we could fix the problem. We worked out a payment plan and the customer paid. Had I followed the instructions from my boss the sale would have been a bust." Credit managers do think differently and this is more than often a saving grace for the company.
André shared the following tip: "One thing that would never change is the use of a telephone which was and always will be one of our biggest assets and our main tool of success as far as collections and bad debt is concerned. If you don't believe me; do away with this tool and then monitor your days outstanding. The difference will be evident."
André believes that Debtors Departments are often seen as "the stepchildren" of a company and there is a general feeling that they are not part of the "family". He confirms the constant conflict that exists between the Sales and the Debtors Departments in most companies. "It is important to be firm with your Sales Department in terms of policies and procedures. You should tell the Sales Department what the rules are when opening an account. When a sales person asks you to open an account for a customer without credit vetting or a completed credit application tell them that you will do so, and then ask if they will give the client a 50% discount for paying cash up front. When they look at you all shocked, ask them if it is then fair to ask you to just open the account."
Despite feeling alone and isolated as a credit professional, there are ways that you can prove that you are an asset to your company. André suggests spending time with the Sales Department or a sales manager so that you can see their side of the business. Another vital thing to do is to teach the sales people more about the Debtors Department. "When your company employs a new rep, they often have no idea about the admin involved, so it is important that you help them learn the ins and outs because the first impression always lasts."