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Declaring War on Receivables --Dickeson

October 2004
Is collecting an account receivable a part of the industry definition of commercial printing? If it isn't now, I am declaring it to be. This is an open declaration of WAR on Receivables. When I see that the average of collections is 50 days for a representative group of printers, "I'm madder than hell and I'm not going to take it any more." This is WAR, good buddies. Victory is collection of the account receivable, in full, within the time allowed.

A sale isn't complete until you've got the full cash for the order in your hands.

To win a war, you must have a set of strategies and tactics. The basic strategy is to have a friendly/frank talk with the customer—before you do the job! Have a detailed understanding of when the indebtedness for a job will be paid. If the customer requires more than 30 days, then you must decide whether to be a print supplier or a banker. If you decide to be a banker, then do what a good banker does with credit cards or any other kind of debt.

Have a detailed list of terms of the debt agreement, in writing, with an acceptable and agreed interest rate. That's all well and good, except that nobody does it. Printers aren't bankers and don't want to be in the banking business.

So, it boils down to a good set of collection tactics, doesn't it? Be sure that someone in the company is designated General of the War on Collections; call him/her the GWC. Accountability must clearly rest on his/her shoulders. Don't try to push it off onto "marketing and sales." If you're a small shop, then the GWC may be the CEO, who may also be "marketing and sales." There's no victory until the account is collected in full. Somebody must be in charge of collections. Here are some tactics for the GWC.

1) The invoice goes out by e-mail the day of delivery. Days outstanding starts with the date of the invoice. No excuse is acceptable once you know the "count."

2) Be sure that all charges for customer changes from the original agreement have been agreed upon and documented. If they haven't been, then do not charge for them.

3) Call by phone within three days of invoicing. "Was the shipment in good order? Is there any problem with the order? The invoice? We operate on a tight cash flow here. What day shall I schedule payment of the account? Do you need a hard copy of the invoice for your records?" Take and keep careful note of who said what and when.
 

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