Getting Paid - it's really down to you.

I’m sure I am not alone in feeling a sense of frustration that provision of goods on open credit terms seems to treated by too many in Credit as a ‘parlous’ occupation, one in which those dastardly customers will take one’s goods and simply not pay.

It’s a fact that any post on social or business networks about such issues as DSO, debt collection, enforcement and prompt payment codes are guaranteed to elicit huge response, some practical and sensible with others bordering on obsessive suspicion of debtor intentions. Throughout my career in credit, I never once thought of them as ‘debtors’, preferring to call them clients or receivables as this in truth is really what they are.

Any sensible rational person responsible for receivables knows precisely why occasions arise and clients fail to pay on time or at all. Almost every one of these reasons can be addressed and prevented to allow frictionless trade, continued profitable supply, extended client relationships and ease in collection.

Some in Credit are perfectly happy to perform functions and routines designed to maximise receivables within their own remit but often fail to act in dealing with issues that are not. Disputes are a part of trade, our job is to limit these and work swiftly to rectify them. Terms are or should be a direct Credit responsibility. Credit policy should be written by Credit and be known to everyone within an organisation. Credit should have set agreed sign-offs in matters of protracted or difficult client disputes. Credit should have absolute control of held orders to limit or eradicate them. Absolutely everything must be done to ensure order flow is uninterrupted. It can generally be achieved or hugely optimised if one area which has the skill and expertise (Credit) is given the responsibility.

Not everyone engaged in Credit is given the full range of tools to perform the function successfully but in every such case, I urge you to fight your own war and ensure you present unassailable evidence that you can deliver. If something is broken along the chain and out of your remit, don’t just sit back and wait for it to be fixed, take a lead and make it part of your remit or sphere of influence.

When you have full control, you know exactly how much cash is going to come in and when. I know I did.

In over 30 years, I never once failed to deliver against forecast having achieved what I called optimised collection rates. We knew exactly our volume of receipts and overlaying graphs of daily cash receipts over a month’s cycle over the course of the year was a uncannily like ‘groundhog day’ but less boring. It was certainly refreshing never to have a Finance Director ask me how much cash we were expecting and when. This was based on client terms, known payment cycles, known minimised dispute percentages, known direct debit clients and control of risk profiles. It helped to have incentives and commission paid to credit in addition to base salary or as part of it, in achieving optimised cash collection rates. It could certainly never have been achieved without the broader remit of Credit.

The CICM has done some terrific things in terms of Prompt Payment Codes but we must never overlook the fact that we in Credit and indeed the companies we work for have by far and away the greatest effect in how clients pay us.

If we deliver good service consistently and as required, apply ourselves diligently to receivables and have full control of them, getting paid on time will never be a problem.