Is it possible to beat your collection goals in this environment? Yes it is possible ... and here are some of the secrets of those who are

In our recent benchmarking survey on collection technology, one of the questions explored whether respondents were meeting, not meeting, or exceeding their collection goals.

Surprisingly,  29.7 percent reported that they are exceeding their collection goals, a rather remarkable statistic in this environment. So we set out to identify what some of the characteristics of those credit and collection operations were. When analyzing the dozens of comments from survey participants, we were able to identify 7 "themes of success." Keep in mind that all are inter-related and some of the comments overlap into multiple areas.

But here are the key ways overachieving credit departments are beating their collection goals in the worst collection environment in decades:

1. Staying Proactive and Prioritized
Simply being more proactive as well as properly prioritizing the big workload is helping many firms stay ahead of the collection problems. Writes Dan Sproat, corporate credit manager at Wholesale Fuels, "We react to customers BEFORE they appear delinquent. We know who the poor and difficult paying customers are. We target them before they are even due and remind them what they need to do to keep product flowing and stay current. Being proactive like that has seemed to help."

2. Increased Monitoring
Simply increasing existing efforts is one way to get ahead of the curve, if you can do it. Hard as it is, it's essential in this environment, and many report that this strategy is helping.

"We meet daily to review suspended orders," writes Gordon Miller, general credit manager at ISP Technologies. "This allows my analysts to understand our goals, and keeps the philosophy consistent. It also helps me to understand the issues they are facing, and where I can work with internal or external areas to help them improve their collection efforts. We are also constantly working on new reports that will help our Analysts prioritize their efforts."

3. Use of Automation Tools
Many of the "collection over achievers attributed their success to automation of their collection function. Tracy Skipp, credit manager at Krug, Inc., writes that they "introduced automated collection software two years ago. This has helped our collection function 1,000 percent and allowed our collectors to make more daily contacts with past due customers."

4. Making Organizational Changes
Thom Beaupre, CCE, corporate credit manager, Metal One America, tells us that they just created a 'risk committee' that meets bi-weekly to address problematic situations. "The committee includes top management," he writes. "Accounts reviewed are set for follow-up and action taken before the next meeting. Calls on delinquent items begin at one day beyond terms, credit files and limits reviewed more often. Shipping suspended on any account with delinquent dollars greater than 20 days beyond terms."

5. Using Outsourcing
Sometimes you just can't keep up with everything and it makes good strategic sense to find help with an outside partner with core expertise in the area you need assistance in. Certainly, more and more firms are turning to outsources to help keep their A/R clean. Harris Semegram, director of credit, Prestige Brands Holdings, Inc, is a good example. Harris notes that outsourcing some of their extremely labor intensive activities such as cash discount follow up or coupon reconciliation has helped them.

6. Quality Initiatives
Patrick Spargur, corporate credit and collections manager at Bally Technologies (see our recent story on Bally, "Rescuing Collections") has accelerted collections by focusing on quality. Spargur told us that at Bally, they are constantly enhancing their department by automating processes and by adding credit and collection tools and services. "We discuss collection challenges as a team," he writes, "and address them with other departments to identify if processes can be improved. We also hold KAIZEN events to help other departments understand issues and help us resolve them without affecting other company processes."

7. Sticking to the Basics
Don't take anything for granted. And remember, the basics come before all else. Sometimes, before you can expect to have an over-achieving collection operation, you may need to back up and take care of the basics of credit management. That's what Andrew Keefer, credit manager at Orthovita, Inc. has done. When he started there, they didn't have a credit application, statements, or even any letters. "I had to create all of these," he told us.

Hope is Eternal
And lest you think that everyone we talk to can leap over tall buildings with a single bound, well, rest assured, that's not the case. One very smart and savvy credit exec we know wrote: "I dream of a staff I can lead, improve, motivate, organize and then live the good life, but not this year, maybe next year."

So in summary, it is possible to excel in collections today. To some degree, we're all dependent upon the markets we serve. Clearly, some are better than others, and some are truly horrible these days. Nonetheless, it's your job to manage the expectations of your management.

Given realistic expectations of you and your management, you can make strategic changes to go from being underachievers to exceeding your goals. Pick the best strategy from this list and start today!