There are a surprisingly large number of best practices that can be applied to credit and collections. Some are located in other functions, such as sales and credit, that have a direct impact on the collections function, while others are more directly associated with the activities of the collections department. Most of these best practices are relatively inexpensive and easy to implement, as noted in Exhibit 7.1. The exhibit notes the estimated cost and install time of implementation for each best practice. In most cases, it is a relatively simple matter to complete an implementation, with the exception of those items that require custom computer programming or that involve the participation of another department. In these two cases, either the risk of a lengthy programming project or the refusal of another department to cooperate can jeopardize a successful implementation. An example of the first problem is automatically faxing overdue invoices to customers, while a good example of the second problem is persuading the sales department to adopt a simplified pricing structure. However, with the exception of these two problem areas, one will find that improving the collections function with the best practices contained in this chapter is a relatively easy endeavor.
|Best Practice||Cost||Install Time|
|7–1||Clearly define account ownership||