MARKETING AFRICA MAL 18/17 mal 18:17 online | Page 90

Those who have worked with
government systems for the first time
usually find it a problem to follow
up payment because of its inherent
inefficiencies in their systems. A
number of companies have similar
problems. One would be wondering as
a credit manager how do you deal with
such a situation.
According to Patrick K. Kairu in his
book Credit Management he gives
the following advise: Gain enough
understanding of the customer
customer’s systems to see where the
problem lies; Contact a senior financial
manager and try to persuade him or
her to find a solution; If it fails to
work, discuss with the sales team and
agree on a joint approach unless the
sales person can solve the problem
by talking to the buyer; and Arrange
for a joint visit and be prepared to
compromise. No doubt the proposed
procedure will enable you speed up
your customer to pay by tackling the
areas of inefficiencies.
‘‘How they treat your accounts is critical.
How does the Agency represent your brand?
If they are too aggressive they may be making
it impossible for you to ever do business with
a customer again. Every once in a while an
account may suffer a business downturn, so
you don’t want to let an infrequent problem
eliminate your chance of ever doing business
with the customer again.’’
for payment. Most excuses given for
non-payment seem to allude to this.
As a credit manager one should
look for such signs and amicably
deal with them. Most clients in this
require collection that has a lot of
impact as they are belligerent and
are not ready to bulge.
Misunderstood terms of payment
I worked for accompany where
payments were staggered twelve times
Organization setting a deliberate
and on signing the contract only one
policy on payment
installment amount was indicated
with a small sentence underneath
Some accounts payable staff would that the above amount is payable
always give the excuse that we will twelve times, this was always a source
only pay you once we are done
of complain and disagreement. Most
with utilities such as water, rent
of these disagreements emanate
and after payment of salaries and
from unclear payment terms and the
keep your payment pending as long resultant arguments will generally
as they wish. With some setting
delay payments. One area a credit
payment terms pegged to say 60
manager has to work on is having
days or 90 days before they pay,
clear payment terms that will
excuses such as our cash flow is
generally eliminate or minimize such
not good at the moment is a good an occurrence.
example of this deliberate policy.
The deliberate policy is meant to
Queries and inherent disputes
enable them take as long as they
wish, but all this depends on the
Those who work in the credit
company’s market power.
department understand that queries
form a very big part of customer
If you have supplied to supermarkets service. The queries are varied from
it’s quite a challenge, though some
quality of goods supplied, overstated
suppliers with supplier power usually amounts on the invoice to actual
coerce them to be paid earlier as
contractual performance. While
they have a dominant position in
taking into consideration these
the market. This is one of the most
queries it is important to note that
common reasons for slow payment. I not all queries originate from credit
have one such defaulter I am chasing department. Some queries could be
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sales related such as the promised
discounts, delivery patterns and
some even on the order size.
The credit manager should be quick
to resolve them. It is worth noting
that many queries only surface when
requesting for payment otherwise
the parties will usually remain quiet.
A credit department has to expedite
as quickly as possible not to delay
the payment. If it is passing to those
who should handle it, ensure it is
done in reasonable time.
Shortage or lack of cash to pay your
invoice
Most people believe that this is
the only reason for slow payment
which is not necessarily the case. For
credit professionals there are many
signs that indicate in credit terms
corporate failure or over-trading
some of which are financial while
others are communication related.
Common financial examples are:
Customer issuing dis-honored
cheques; Company losing a key
supplier; Suddenly losing or
changing its management team,
in particular the finance director;
Having a sudden change of auditors
or trouble signing off its accounts;
Late delivery of information;
Asking its bankers to send cheques
for round amounts or postpone or
push forward certain payments; or
Deferring any planned or regular
capital expenditure