To thrive, sellers must take debt collection in stride. Or would they rather Finance does?
If the ultimate objective of sales is to generate income, then debt collection is in itself a salesman.
A reader friend of mine told me of an interesting experience he had a few years back. When he joined this firm that sold tires, they were at a deficit (minus) position of a whopping 420 million shillings. As General Manager, Sales, he gave an unusual instruction to the sales team: “Forget new business – collect”.
That was the brief. “Go ye forth and collect.” And collect they did; so successfully that by the end of that year, they were in a credit (plus) position of 20 million shillings.
Sellers dread collection
Regrettably, many salespeople dread to collect.
They see it as the fly in the relationship ointment. For instance, if I’m selling organic pest solutions to flower farms, I’ll be happy to do the demo which lasts a season (three months), and also excitedly see to it that the buyer gets the goods he has ordered, delivered.
But because I don’t want to ‘spoil’ the cozy relationship I’ve built with this buyer, I want someone else (read Finance) to ask for the money. Sometimes Finance (Accounts) does, but bereft of a brief about the relationship dynamics involved, friction is generated and the relationship likely marred.
Usually though, Finance doesn’t ask, Finance demands!
With no gloves on, Finance follows policy (for example, “It’s 90-days oerdue”) and suspends or closes the account when the next supply is requested and the past one hadn’t been paid for, or the cheque bounced.
Unbelievably, the seller, drunk in the aroma of the utopic relationship, gets offended arguing, “But we will lose the customer.”
Read: From motivation to exhaustion: the silent cause of sales burnout
Sales completion is payment
Basic selling reminds us that the sale is complete when payment has occurred.
Progressive sellers know that even when the structure allows for someone else to collect (as it does in mature business-to-business selling), this only transfers responsibility- not accountability- for the sale.
And why? Because, the same basics tell us that growth is most optimally achieved through existing customers themselves and those they refer. Having a pulse on the relationship, irrespective of who is handling the account at the time, therefore, becomes a necessity for the seller.
Debt collection is salesmanship
In addition, it is only human to want to pay later (or never) so long as a loophole exists.
It’s why ‘pay yourself first’ is a cardinal rule to financial success. How successful would the government be with collection, if they allowed us to pay our taxes when we wanted to?
Sellers dreading to upset the apple cart by collecting payments overdue, only serve to create that loophole that buyers exploit leading to such deficits to the tune of Ksh. 420m.
Limits sales
This aside, an overdue debt still works against that sale because a debtor is less likely to order from you if he has your debt. ‘Let me pay it first’, he will say.
In the meantime, he will most likely be getting his supply on credit or cash elsewhere. After all, his business won’t stall because he has your debt. Yet, you are letting yours stall because of the same reason.
Movement of money in and out of a business is the lifeblood of a business and critical to success.
This is also true for you- the individual. Your very tools of trade (salaries included) depend on this. On the other hand, if he has paid up, he is very likely to exploit the opportunity and state, “Hebu, supply me with tyres, now that I don’t have your debt!”
Read: The Business Owner Debt Collection Dilemma : Should Salespeople Take Charge?
Check out our short courses and other services here. If you would like to have your sales team to sell more, we can help. In order for us to do so we propose a free consultation meeting or a call. If in agreement please complete the form below and we will get in touch after receiving your details, none of which will be public. Thank you.
