Sales People are Not Bill Collectors

Subject: Selling, Account Payables, Collecting Bills, Sales Training

by Victor Antonio

One day I’m in a meeting with my staff where we were going over next year’s sales projections and profit margins on our product sales.  At the time I was the CEO of the company and my job was obviously to insure that sales are coming in from one side and that are costs for manufacturing are down from the other side. 

In the middle of selling and cost control lies this specter called, Accounts Receivables.  For those not familiar with the term, it simply means bills  (money owed) that have not been paid to the company.

During this staff meeting, one of my finance personnel began to mention how she needed help from the sales people in collecting these outstanding revenues owed to the company.  It was at that moment that I got very upright in my chair and ask for a clarification. 

The finance person, realizing my reaction, quickly clarified that she only needed the salespeople to help her collect on bills that were more than 90 days past due.  The exchange went along this line:

Me: “What are you specifically asking for?”

 

Finance: “Well, we have bills that are more than 90 days over due and I would like the salespeople to help bring these accounts receivables down.”

 

Me: “Wait a minute.  Are you proposing that salespeople also act as bill collectors?”

 

Finance: “Well not bill collectors just help settle these accounts."

At this point I knew she was not skirting my direct question.  So I made the following comments which was also part of my overall sales philosophy.

Me: “Let’s be clear about one thing.  Sales people in this company only have one task, to sell.  Their ability to sell depends on our great products but more importantly on their relationship with their customer.  If one day they came into a meeting talking about past due bills with their client, who has little to do with purchasing, can you imagine how damaging that would be?  Can you also see how bad that makes the company look when our salespeople are doubling as bill collectors?”

I could tell by here body language and demeanor that she was unsure of what to say next.  I went on to clarify the importance of maintaining a separation of church and state when it came to sales and accounting.

So What Can be Done? 

In this case, there are several approaches to this dilemma.  I mean, bills have to be collected if future sales are to occur.  So here were my suggestions to the staff:

 

1)  Accounting should make sales aware of delinquency in payments

 

2)  Sales should not act on this information only use it as leverage when the time comes.  For example, if the customer tells the salesman he is going to place another order, the salesman would do well to mention to the client that there are certain outstanding payments due and how it might impact delivery.  This could be done at that moment.     The conversation could go something like this:

 

“Bill, I think it’s great that you trust us enough to place another order and I thank you for your business.  In order to insure we meet your delivery times, I would ask you a small favor, ‘Can double check with your accounting team to make sure we are fine on accounts payables?’  I want to make sure there aren’t any hiccups in the delivery time.

 

3)  It could also be done after our company receives the purchase order.  Our company’s purchasing department would call our client’s purchasing department and inform them of the need to pay.  

 

4)  In conjunction, the salesman can speak with his client and inform them that there may be some delays due to account balances and payments.  The difference in this approach is that the salesperson is not speaking to the client in order to collect a payment.  He is merely informing the client of potential delays caused by accounting.  In the former case, it seems like nagging.  In the latter case the salesperson is perceived as being diligent in insuring that the product is delivered on time. 

Like in any relationship, the introduction of money into a conversation can be very damaging if not managed well.  There is an understanding between the client and the salesperson that they are there to negotiate product and price, not payment…that’s an accounting issue.