Many companies seem to regard credit management as a necessary evil. You obviously have to make sure you get the payments you’re owed, but this could be seen to have the potential for damaging good relations with your customers.
In fact, nothing could be further from the truth. Far from causing damage, strong, confident credit management can actually improve relationships.
Nurturing Customers
No doubt you put a lot of time and effort into building up good relationships with your customers, and asking for payment can feel like the fly in the ointment. It’s not, of course. You have a commercial relationship with your customers, and an essential part of that is payment for goods or services received. Virtually all your customers will take this for granted, and the few who don’t — well, do you really want them as customers to start with?
At root, credit management is about facilitating that payment to the best mutual convenience of both parties. To that end, you need to get to know your customers’ needs and understand what’s going to best enable them to pay you reliably. Or, if they already do, use that understanding to offer them more.
Managing Your High-Risk Customers
When it comes to those customers who aren’t wilful debtors but have a tendency not to pay up on time, understanding their needs and meeting them halfway can improve both their payment record and your relationship with them.
You’ll need to review all accounts on a regular basis and use the data to categorise the customers into levels of risk. While low-risk customers should certainly not be ignored, it’s the high-risk ones that should be prioritised in the collection process. This will give them more time to arrange for payment, not only making it more likely that they’ll pay on time, but also reducing the stress on them.
Good Credit Management = Good Relationships
In just the same way that the best goalkeepers rarely need to make spectacular saves, the best credit managers are the ones who rarely need to hassle customers for payment. It’ll happen sometimes, needless to say, but using your relationships with customers to make it easier for them to pay will ultimately reduce your work, besides being positive for those relationships.
If you want to discuss strategies for strengthening your credit management, please contact me and check www.sjcollections.co.uk
