Hi Everyone!

It’s Hector and as always, I’m delighted to hear from many of you regarding your credit and collection issues. 

One idea I would like to talk about is the correlation between the size of a company and the role of the credit professional. In most small to medium sized businesses, credit professionals often wear many hats. They can be the credit manager, the collection professional, the customer service representative, the controller, or even the CFO all wrapped up into one person. In being a credit all-arounder, one might have good skills in some of the functions being performed and lack abilities in others.

I heard from one reader, a sales professional, who was “quietly” explaining about his credit manager to me regarding several daily functions, which included making collection calls to past due accounts. One of the problems he observed is that while the credit manager was making every attempt to stay on top of these accounts, the tone of the voice and the delivery of the communication were uncomfortable to the customer. 

Instead of just politely asking when payment would be forthcoming, the credit manager, with a very fast communication rhythm, had a tendency to scold the customer. He would start out by first lecturing the customer how fortunate they were to receive credit. Then through the use of rhetorical questions, he would (I believe unintentionally) diminish the customer like this: “Why don’t you plan ahead to avoid these cash flow crunches?” or “Why don’t you feel appreciative of having been granted credit and receiving our products?” 

When the sales manager hears from the customer about this kind of communication from the credit manager, he cringes and apologies. He knows that the credit manager has a lot on his plate and is contributing to the company in many wonderful ways, but his communication style with past due accounts leaves a terrible taste in everyone’s mouth.

In general, I suppose we could say that credit managers have a tendency to be more analytical by looking at numbers and documents in order to evaluate the potential to grant a certain level of credit. Depending on the individual, this analytical personality doesn’t always lend itself to being a communicator who can navigate complex human relationships with grace and diplomacy. 

When rhetorical questions are injected into the request for payment, they have a tendency to put the other party on the defensive. Without even knowing it, they can shame the other party. Or they could cause them to withdraw and become evasive about payment. Or conversely, they might trigger an aggressive reaction causing the conversation to quickly escalate into an argument. 

Like many of us who are constantly multi-tasking, even if we are able to cover the bases and get the job done, it doesn’t mean that the job is done well. In other words, one might be a great credit manager but in performing collections, are they able to:

  • listen carefully
  • establish a rapport  
  • communicate constructively
  • be a problem solver
  • effectively persuade 
  • grapple with difficult circumstances

The above is just a smattering of the human relations skills that a good collector should possess. This doesn’t mean that a credit manager can’t also have these same skills and much more. But if they are not part of the personality, then passing the collection torch to another individual who will be a better fit and allow the credit manager to concentrate on their other functions would seem to be a much more effective collection strategy. 

Hector

Hector the Collector is a credit, collection, and human resources advice column by Nancy Seiverd President CMI Credit Mediators Inc. Your thoughts and comments (nseiverd@cmiweb.com) are most welcome!

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