CREDIT MANAGEMENT
ARE YOU AFRAID
OF OUTSOURCING
DEBT COLLECTION
FUNCTION BECAUSE
OF LOSING CONTROL!
By Wasilwa Miriongi
I
n the last Article I talked about
the importance of Cash flow to
your business and more often than
not cash flow issues arise in credit
administration because of lack of well
coordinated collection function with
stages that a debt passes through to
eventual collection.
Blaming customers for non-payment
may be the easiest for any company
to do, but actually, that should not be
the case where you have a well defined
credit policy. Credit Managers always say
“A sale is not a sale unless it is paid for”.
It is not difficult to know that Bad
Debts can be crippling to a business
of any size in today’s volatile market.
Chasing debts can be difficult and
sometimes an impossible job for any
credit department.
Sure, taking a proactive credit
management approach especially
having a credit policy in place will help
you avoid many problems associated
with late payment.
Unfortunately, it is inevitable that at
some point you will run into a client
that is facing bankruptcy or simply
refuses to pay an invoice due to a
dispute or cash flow problems. In these
‘‘Just like the Bible says every man is a
potential sinner, every business large or
small as long as they use credit as one of their
tools of trade, will have a collection issue.
Despite their best efforts, some accounts will
fall in arrears. Some customers simply will
not pay. And, like a rusted bolt, they are just
not going to budge. So they reach out for a
tool with added torque to get things moving.
An outside collection agency will do.’’
70 MAL 11/16 ISSUE
situations, it is necessary to identify
these troubled accounts quickly and
to escalate them to a debt collection
professional, sooner rather than later.
Just like the Bible says every man is a
potential sinner, every business large
or small as long as they use credit as
one of their tools of trade, will have
a collection issue. Despite their best
efforts, some accounts will fall in
arrears. Some customers simply will
not pay.
And, like a rusted bolt, they are just
not going to budge. So they reach out
for a tool with added torque to get
things moving. An outside collection
agency will do.
One company that I approached to
offer debt collection services put it
bluntly that that they do not hire
external debt collectors, yet my own
internal research told me they were
owed millions of shillings they were
struggling to collect.
“I am afraid to outsource my potential
bad debt because I do not want to
lose control over my customers.”
quotes like these are so common in
business circles that I am compelled
to comment that is purely based on
believe systems rather than prudent