The administrative call

Many customers do not pay their suppliers because of administrative issues, rather than a focused intent not to pay on time. For example, any of the following issues could be delaying payment:

  • Invoice not received

  • Invoice out for approval

  • Error on invoice being investigated

  • Cannot locate receiving documentation

  • Cannot locate authorizing purchase order

Many of these issues can be resolved by the seller, since it has nearly the same packet of information pertaining to the sale transaction as the information being collected by the customer’s accounts payable department.

A reasonable approach to collecting the larger invoices is to make a courtesy call some days before the invoices are due for payment, just to see if they are scheduled for timely payment. If not, the caller can offer to assist by providing any needed information, such as clarification of the invoiced amount, documentation of delivery, and a copy of the customer’s authorizing purchase order.

These courtesy calls can be assigned to someone other than the normal collection staff, since the intent of the calls is to provide information, rather than demand payment. Given that the mindset of a courtesy call is completely different from a collection call, it makes sense to completely separate the two types of calls among different staff. By doing so, those assigned to courtesy calls can be trained in a different method of customer contact that focuses on servicing the needs of the customer.

If someone makes a courtesy call to a customer and then suspects that payment of an invoice will be deliberately delayed, then contact the regular collections staff at once, so that they can begin collection activities sooner than would normally be the case.

The use of courtesy calls is only cost-effective for the larger accounts or those accounts that have a history of being flummoxed by payables paperwork. If a customer has a proven history of reliably paying on time, there may be no point in annoying them with courtesy calls.

Related Courses

Credit and Collection Guidebook 
Effective Collections