From the Currency of International Trade – Part Two
A Nugget of Wisdom and Best Practice: Collection – the Path to Success
Not every company that is profitable is cash healthy. Profit does not mean cash. And bills cannot be paid with profit. Cash pays bills and dividend. Cash gives life to the business enterprise. When cash stops circulating, the enterprise dies. Cashflow is vital for the success, survivability, and profitability of any business entity or enterprise.
So, everyone in the company should be concerned with cashflow. We all need to make sure that the company has a healthy and positive cashflow.
So, I ask the question: When does collection start?
As you see in the table below, collection starts with the marketing message and the company’s sales efforts. It continues with credit due diligence and it is enhanced with customer service. Lastly, collection efforts are expended when an account fails to pay on time and according to terms agreed upon. In the session I will also discuss the Ability and Willingness (AW) factor shown in the table.
The focus of the credit and collection professional is to make sure that credit due diligence and collection efforts work hand in hand to guarantee the positive cashflow of the business enterprise.
I hope this nugget of wisdom and best practice could help credit and collection professionals mitigate the risk and help their companies to be cashflow healthy and help their customers to prosper.
This is one of the nuggets I expound and explain in the course The Currency of International Trade Part Two: Highlights on Collections.
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Eddy A. Sumar, MBA, CCE, CICE, and CEW, is the Founder of ERS Consulting Services in Rancho Cucamonga, California; he is an International Trade Financing Consultant; a Consultant for the Center for International Trade Development (CITD); a member of the Guidepoint Global Advisors, and an Associate of Quote 2 Cash (Q2C). Mr. Sumar is a research consultant, author, and a public speaker and enjoys writing and traveling. Contact: e-mail: email@example.com.