Sales and Credit - 08/23/2007

The guide recommened by Donna Fenn http://www.loanuniverse.com/pastdue.html states "Be relentless in enforcing your collections"... First of all the vast majority of past due business customers are NOT trying to avoid payment and there is no need to take on an "enforcer" mindset. Past due A/R management is the "Completion of the sale", not collections. The goals of past due A/R management are first and foremost to keep credit customers current and buying and secondly to identify the small percentage of customer who represent a potential for loss. The guide also tells the reader to send a "dun", that is so 1950 and does nothing to help identify why the customer hasn't paid. The articles linked in the short guide I wrote provide much more detail and should be read before comments are made about the usefullness of the guide. Credit is NOT an accounting function ...it is a sales function. Credit is the selling of a product or service based on payment at a later date. Credit is a lubricant of commerce and allows for the expanded movement of goods and services. Drop the word "Collections" from your understanding of credit...unless you are a collection agent or Tony and the boys.

Sales and Credit - 08/22/2007

If the goal of a business is to limit profitability along with bad debt and DSO (days sales outstanding), then by all means look for ways to turn down profitable sales, and when a customer becomes delinquent assume they are trying to avoid payment and beat them up....but that is NOT what this guide recommends .