While this may work in some instances I believe your business would be better if you involved the credit team earlier in the process. Would you agree - there is no point selling and delivering goods that you are never going to get paid for. Then, is there any point in taking these orders and sending them into the office? So, is there any point to the sales rep wasting their time in pursuit of this customer and this order? If not would you have been better served to run a list of prospective customers past the credit controller on a daily, weekly or monthly basis? Tell the Credit Controller – “this is the list of 50 customers we are targeting next week, can you run a quick check and confirm the ones you would be happy to give credit to” (An indication of an amount of credit you would be prepared to extend would also be useful). This way the sales staff have a better understanding of the potential customer and is happy to know if an order is obtained it will be delivered, without hesitation.
The sales staff can also manage potential customers expectations, if they know in advance what credit will be extended or if cash on, or before, delivery is required.
Using this simple pre-emptive model can boost your sales and increase your profitable orders. It can also add to the level of customer service you offer by focusing on the customers that generate the greatest return. This approach can also increase your profits, as you become aware of high, medium and low risk customers you can adjust your pricing accordingly, obviously the higher the risk, the higher the cost of credit that has to be passed on to the customer, tracking this premium against your late payment costs and eventual write offs will prove if your strategy is working or needs to be revised.
If you involve your Credit team even earlier, the payoff will be even greater. Get your Credit & Marketing teams together when you are deciding on new markets, drill down to individual customers in each marketplace before the sales team make a single call, you can have your marketing plan completed and include potential customers you would be happy to deal with, who have the wherewithal to pay their bills in full and on time.