Take a look at those agings reports – you should be seeing the number of past-dues going down. Small business delinquency rates have dropped across several key buckets in recent months.
That’s according to a third quarter Main Street Report from Experian and Moody’s Analytics.
Specifically, you should be experiencing a drop in the number of customers you have that are:
- 31-90 days delinquent, and
- 90+ days delinquent.
This is good news on several fronts.
Not only are fewer customers stretching payments, but you know the longer an account goes past-due, the worse your chances are for ever collecting that money.
Keep it going in the right direction … with a little help from Sales
Hopefully you’re experiencing this phenomenon in your A/R department when it comes to delinquency rates. You’ll want to get while the gettin’s good and capitalize on this momentum.
A great ally in this? Sales. See if you can’t enlist them to help get some of your organization’s accounts current.
Of course you’re not going to turn sales into your collections team, but here are a few ways to strategically tap Sales when you most need their help with delinquency rates:
- Create a common benchmark for both Credit and Sales – total sales collected. That will motivate Sales to stay involved.
- Set an objective standard for when to get Sales involved. When the amount it’s costing your company to carry a past-due account equals the cost of a sales call, you’ll want Sales on the horn, say A/R experts.
- Structure salespeople’s commissions so that they reflect the length of time it takes to collect the invoice.
- Take a get-tough approach: Some of your peers don’t pay commissions on any accounts that go 90 days past-due.