Anyone who has worked in credit and debt collections for any time knows about the troubled relationship between sales and the credit department. When sales people get paid a commission, they want to make the biggest sale, when they get paid after the customer pays, they pay a little more attention and probably already do these three things!
The first thing the sales department has to do is make sure to get complete paperwork and credit applications for the credit department so that they know the customers credit worthiness BEFORE trying to sell them anything.
The next step is to be aware of the customers credit limits and not to oversell. When they oversell, the customer is put in a bind, struggles to make the payments, sometimes cannot make the payments and then the credit department has to step in, further tainting the relationship. This can all be avoided by the sales department knowing their limits and not over selling to people.
The last step for a sales person who does oversell and ends up with a customer who is struggling to pay is to go back to the customer and try to work with them to get the balance paid. This step can be avoided when the sales department works with the credit department. I have done this in the past and the sales department does not like being a part of the collection process and once you ask them to do this once, and they see what a struggle it is and that they could have avoided this, you can stop this from happening again moving forward.
Another thing that has worked very well for me as a credit manager at an oil company, was getting policies put into place where the sales department did not get paid their commission until the invoice was paid. Since a sale is not a sale until the bill is paid, this works well for everyone, except the sales department who wants to get paid regardless of whether the invoice was paid or not.
When the sales department and the credit department work together it creates a win-win situation for both departments as well as the customer. The customer should be the focus, you want to provide a service, you don’t want to over extend your customer, because this puts a strain on the customer, the business and the customer/sales relationship. The sales department needs to realize they will not make a commission on a sale that is not complete. The sale is complete when the order is paid for – if the order is not paid for or is paid late, the company starts losing money, and hits a sour note with the customer. Work with your customers, create good customer service, and work together within departments at your business for a successful sale, and a successful business.
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