Thoughts for the Day

Style

There is no one style appropriate for every occasion. Learn to adapt your style to particular circumstances, but make sure you keep to your principle centered beliefs.

Virtue

The ability to recognise and act in accordance with the spirit  not the letter of the law.

You need to know the greater good, do the good and deliver the goods.

Debt collection

First thought
A sale is not a sale until:
a) you have an agreed amount payable and you have had the dance with terms of trade / order / delivery / invoice / credit note
b) you have got the money in the bank

Second thought
You have got past “Go” so before you collect your £200
a) you have made sure your documentation is right
b) you have sent a statement out asking for the agreed money
c) you have followed this up with a phone call asking when the cash is expected
d) you have still not reveieved the money and are threatening legal action, but deep down you know you won’t do this because it is costly (and so does the customer)
What else should you do?

Here’s what I tried. I appealed to his sense of fairness and switched roles.
I sent this email extract out when I became frustrated at a customer who was obviously having cash flow difficulties but was afraid to tell me.
I have changed the names to protect the innocent.

The background to this was a debt owing on the Car Rental business.
Dear Customer (real name withheld),
I can only support what Nicki says, we believe we have acted in good faith in reinstating Insurance and Central Reservations business, and we will keep to our part of that arrangement.
What I am finding difficult is believing your committment to ensuring that contractual obligations are met on time.
Despite assurances from both of you that all committments will be met, we have had two payments this week that have not.
One on Monday and one today totalling together in excess of £1000, at the time of writing this email, I am still not clear in how you will be rectifying this position.

Our debt position is now worse than it was one week ago

I am now faced with the embarassing position of releasing a car to you with a cheque that has not been cleared (it did not arrive when promised) and I am becoming nervous about this transaction.

I have also been in touch with Kelly who is equally disappointed we have not made inroads into the preparation of a budget which will enable us to competitively quote for your business.

Under the circumstances, how do you want to take this forward and are you able to meet the committments you made to us last week?

What would you do if you were me?

So I tried this re-framing, and yes, it got the desired result. That customer is still a customer, but ask yourself this – what would have happened if he ignored this request? Simple, you would have come to the instinctive conclusion that the customer’s values are simply not the same as yours and you should seriously consider doing business in the future. That is why you should set credit limits for each customer and limit your exposure with people you are uncomfortable with. Remember there are approximately 60 million people in the UK. How come you got landed with this one?