debt collection training course

Worth it?

In a recent article in the Wall Street Journal, it described how special consultants may be called in to deal with a new acquisition of U.S. firms where bribes to local officials may have been the norm in the past.  For a number of years, there has been an Act, strictly enforced by the Justice Deparment – that makes it a criminal offense to pay bribes abroad.

 

If it was just a simple matter of telling someone ‘no more money’, a firm may not need a communications expert. However, it is often more complicated. For example, a firm may have been making payments to a government official to do (at least in a timely fashion) what they should be doing in the first place. The situation may be rife with confrontations, ego and the need to continue to do business.

What to do?

Some firms turn to specialists such as Ken Springer of Corporate Resolutions based in New York and if the acquisition is in India, perhaps Ashish Sonal, founder and chief executive of Orkash Services Pvt. Ltd. By the way, according to Mr. Sonal, “Orkash” means “Nothing is impossible” in Sanskrit. It is their job to inform the bribe recipient that that things are about to change.

To do this effectively they have to research and know who they will be dealing with and deliver the right balance of both internal and external communications.

There are at least two areas in Accounts Receivable where such an approach may be successful. One may not need to call in an outside communications expert, but for some clients and situations this would be effective.

Two major challenges in Accounts Receivable are the “F.O.B.” accounts and “Unapplied Terms”.

The F.O.B. doesn’t refer to ‘Freight on Board’, but to “Friends of the Boss”, the folks who could be related, play golf with some senior managers, went to the same school, etc, who believe they have the right to pay late – and not be reminded.

For “Unapplied Terms” it means where perhaps the terms for your firm have been 15 days net, but this was never expected or pursued and customers have become used to paying in 45 days or later – again, without having any reminders. (“But,” they may say, “we’ve always paid in 60 days!”)

Set up a special individual or team (even an outside ‘special’ representative) to make contact with your customer. Do not have the regular collector or credit manager call them. You’ve tried that and it didn’t work. The new team or individual has a clear communications objective. We want to keep each customer but also to have them pay on time in the future and also to ‘speak well of us’ whether to contacts within our outside of our organization.

Difficult? Sure it is but…Orkash! (Nothing is impossible!)

This Month’s Pithy Saying:

Next to doing the right thing, the most important thing is to let people know you are doing the right thing.
John D. Rockefeller