It may seem as though the sales and credit departments are fundamentally at odds with one another: One department is charged with the task of gaining as many new customers as possible, while the other must ensure that the company only accepts business from those customers who are most willing and able to pay their debts.Overcoming these two departments’ differing goals is a challenge, to say the least.
The reality, however, is that credit and sales functionally are not so different. More specifically, by sales we mean the inside sales team. Both departments are customer-focused, which means there are many strategies and tactics that the credit team can learn from the sales team, and vice versa.
Credit is a numbers game
Inside sales teams focus on a high volume of contacts and interactions with those contacts, which can often make it seem like a numbers game where a certain percentage of leads will convert if enough touches are made. More customer interactions at a consistent conversion rate means more sales.In very much the same way, credit and collections is a numbers game. A certain percentage of customers are going to pay on time, another portion will pay late, and the rest will try not to pay at all (until they get a little help from the credit department!). Similarly, the more phone calls, emails, and customer interactions a credit manager makes, the more likely they are to collect the outstanding debt.
It’s encouraged for both credit and sales teams to look at their numbers, count their customer interactions, and above all else, they should measure their successes to see what is working so they can repeat the success.
Use Technology to make your job easier
We are surrounded by technology all day, every day. Most credit and sales professionals use a computer to perform their job, their colleagues use computers, and practically everyone has a smartphone in their pocket. What technology affords us is efficiency that cannot be achieved otherwise. So it would make sense to see how we can leverage technology to improve the processes of both the sales and credit teams.Many sales teams will use email automation tool to send bulk emails – batches of 50 or 100 emails – that have largely the same content, with varying recipients. ToutApp, GetOutreach, and Sendbloom are all excellent platforms for automating the outbound sales process that might even be able to be hijacked to perform a credit managers functions. On the credit side, companies like Funding Gates help keep your company’s accounts receivables organized. TrueAccord is even using data to have frictionless and high collection rate for any type of customer. Any of these apps were built to help you stay in touch with your customers, which leads to faster collections rates.
Whichever tool you choose to fuse technology with your process, the idea is that you should be looking for ways to make your job a bit easier.
Automate Where Possible
Automation most attractive advantage that comes with using technology to make business easier. Technology can take mundane and repetitive business processes and automatically perform those functions to free up the time spent by the user.Funding Gates recently posted an article on their blog about The Secret to Automating Collections Without Losing the Human Element in which they discuss the importance of relationships and how automation is no substitute for business relationships.
To automate, we must first identify the actions that are taken every day that can possibly be automated using technology. This is not to say the technology is meant to replace the human interaction completely, that would be impractical and bad business practice. Rather, technology should enable credit managers to focus only on those actions that are most important task at hand: collecting on outstanding debt.
So, for example, if a credit manager knows (by looking at the customer’s payment history) that a certain set of customers routinely pay their bills within 30 days after receiving their invoice without any further action, then the credit manager can automatically send a reminder at day 31 for any still outstanding invoices for that set of customers.
Sales teams constantly look to automate those tasks that are redundant (writing cards, sending emails, etc.), and credit teams should be looking at their processes in the same way.
Don’t be afraid to ask for help
Business is about relationships, although we may automate some aspects to make the workload easier, at the end of the day humans like to deal with humans. As a result, when we come to a road block or an obstacle in trying to get to an account, or to get an introduction to a potential customer, it’s always best to lean on those who have a relationship with the customer.The credit team should turn to their sales team to help facilitate conversations with customers who are late on payment. Salespeople should lean on the credit team to get more information about prospective customers that can help them understand how to better serve that customer.
If for example a company is struggling financially but needs a new shipment of material to finish a very important job, the sales team can work with the credit team to extend a line of credit on terms that are favorable for the supplier, but also affordable to the customer. This helps the salesperson close the deal, and it also helps the credit team ensure that they will collect in an historically risky situation.
When sales and credit work together, everybody involved wins and the company is better for it.