Pricing queries are one area that I find totally inexcusable – and as a successful Credit Controller you should share my intolerance of any such instance in your business. Some people say “Our business is complicated” – No it isn’t!! You sell goods or services, you agree a price, you send a bill for that price – how complicated is that?
“Oh we have promotions, special discounts, individual deals that reps do with customers, special rates to key customers, bulk discounts, cash discounts, a different price when goods are approaching their “sell by” date. We have BOGOF’s (Buy one get one free), we have 10% extra free packs, we have coupons, we have loyalty discount – and I am sure you could add a few of your own. Let me go down through this list one by one:
Promotions: All promotions should have a start date and an end date. You should clarify if there is a buy in period in advance and then what about the last few days? If they can buy in advance of the promotional date on the basis that it takes time to get the goods on to shelves, then it stands to reason that goods delivered on the last day of the promotion will be sold through at the full price. The purpose of your promotion should be to drive your own sales and not to increase the margins of your customers. Of course when you can do both you are on a real winner. The other thing that needs to be clarified is the start and end date. Does the start date represent orders placed, goods dispatched, goods delivered or goods invoiced?
To get this absolutely right between your sales department, your marketing department and your delivery guys and your customers purchasing department and on the ground guys takes a lot of coordination. No one else in your business understands the complexity and the consequences of things going wrong, and no one else feels the pain like the Credit Control department – so you need to take ownership and enhance your own standing within the business by standing up and saying “This is how it should be done” and explaining the subtle differences in timing that make all the difference in the end.
Special discounts or individual deals, come about when someone in your sales, marketing or customer service departments tell a customer about the deal. When they tell the customer, all they have to do then is to tell the appropriate person in your company in a timely manner. As simple as this sounds – this is the cause of any disputes in this area. It is all down to communications – it is up to you as credit controller to make sure communications is working in your company. If it isn’t there will be disputes, queries, delays in payments, non payments – I don’t have to tell you – you could write the book!
Finally irrespective of the types of discounts you offer there should be a matrix that arrives at one price for each customer for each event. As long as your system reflects what has been communicated to the customer all will be ok. As soon as you take short cuts or take a chance – it will jump up to bite you at a later date.
In some instances pricing problems occur, not by someone doing something wrong – but by something not being done at all. As soon as this happens identify what should have happened, who should have done it and then make sure that job is on their list from now on.