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 88 MAL 18/17 ISSUE 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