I am often amazed at how little thought and effort is put into this vital area of a business. We put huge effort and resources into prospecting for new customers, then the whole sales process and even customer service.
The job of opening the account is usually a clerical exercise that is stuck in somewhere in the middle, and in some cases is done at the last minute because someone, somewhere is looking to print a delivery docket to get the goods out of the stores or in the case of service to log a service call.
You would not hand €1,000 to a stranger in the street and hope to get it back, then why would you deliver goods or service to someone you don’t know without first checking who they are, what they are and if you can trust them with the goods or service for the agreed period?
Start with a proper New Account Application Form that asks the right questions and gathers the right information. (I am happy to help you with this if required).
Then you must have a process based on the amount of credit required, your profit margins, your place in the market, what your competitors are up to etc.
You need information before you can make your decision, look to the agencies (E.g. Search4less for information you can buy at a very reasonable price to give you an up to date picture of them.(contact me for an invitation to see how this works)
- Use trade references to find out how they are performing.
- Get bank references.
- Use the Companies Registration Office website (www.cro.ie)
- Use your Credit Insurer to verify the limits you are looking for.
- Use Google, Yahoo or Bing
- Use The Irish Times or for overseas customers use ft.com – I know you can’t believe everything you read in the newspapers, still it will give you a picture of how they are performing. Are they expanding or letting staff go?
Have a clear communications map of who and when needs to be aware the account has been set up – the rep, the sales manager, the operations people, the service manager, the boss, the marketing department to apply pricing, bonuses or discounts, your IT department, the credit controller, the van driver… the better you communicate the better.
This process is the root of all success and failure for your business. Make sure you take it seriously, make sure the people doing it fully understand what they are doing and the implications of their actions.
Finally ensure there is some type of management review of all new accounts opened in a week or a month, you just might be amazed at the amount of knowledge that is untapped within your own organization.
Irish Credit Management Training
121 Lower Baggot Street
M: 087 2447052
P: 01 659 9466
F: 01 659 9401
Declan Flood FIICM, Founder and Chief Executive of Irish Credit Management Training is a, renowned trainer, international speaker and author with over 20 years hands on experience in Credit Control and Credit Management with major Irish & International Companies.
He is a graduate of the IICM Education program and a Qualified Business Coach. He received his Qualification in Training & Development from National University of Ireland. He has been training in all aspects of credit management for many years, generating a sense of enthusiasm and urgency that has been experienced by all who have been through the training experience.