Loans to customers shouldn't be part of your business

A small dealer requires contractors building on spec to pay for materials each week instead of monthly. "Contractors want us to wait until they sell the house before they pay us," he said in explaining this recession fighting measure.

Personal contact is recommended by a credit manager with a fine tuned system that works well in both good and bad times. "We believe that it's not a sale until it's paid for," he explains. "We bring our sales people into the collection process more than ever in times like these, giving them responsibility for collecting overdue accounts."

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Crcdit expeils sharc collection tigs, advice on managing accounts rcceivable. .vYays to rccognia dor pays and get money fiom past due accounts.

Know the basics about small claims court laws is suggested by several credit managers. Many states, such as California, have increased the limits, making the court a good credit tool for retailers. Using credit association services and benefits such as seminars are additional recommendations for negotiating settlements and getting paid.

One dealer maintains a high collection rate by getting to know the customers. His credit manager goes into the field to build rapport. Since his business card has no title, he is perceived as a company representative, not a credit cop. "Friendly relations keep the communication line open and help in collections," he stresses.

Telephones can be a credit manager's primary access to collecting overdue accounts. The following suggestions from the Building Industry Credit Association make the process easier and more successful.

Call when the time is right, like the day the bill is past due, to let them know payment is expected. For an established customer, wait until you see a trend. If payments run late two months in a row, call them.

Call late in the morning when people are usually in and relaxed with a feeling for what they need to accomplish that day. Avoid calling on Friday, especially after lunch, when they're not likely to be alert or receptive to a collection call.

Talk with the right person. If you are dealing with an established customer, maintain contact with just one person who is helpful and reliable. For a new account, ask for the person who signed the credit application. If the invoice is seriously past due, ask to speak with the person responsible for approving the company's checks. Keep a record ofyour calls noting the promises made. This helps follow-up and allows coworkers to handle any situation in your absence.

Prepare a list of questions to ask, keep it in front ofyou and get a satisfactory answer for each. For example, is your company experiencing any financial difliculty? Why are your payments slow? Are you expecting a boost to your cash flow in the near future?

Establish good relations with those you call by being courteous and treating them as if they willact in good faith and pay on time. Do what you can to help, such as sending invoices on a different schedule or setting up a payment schedule if they can't pay in full.

Listen for clues to their sincerity. Do they answer too quickly, too slowly, try to get off the phone fast, stall you? Ask for explicit follow through, such as a check in a specified number of days. Record their promises for future action.

Fl LANOGRAMS. While there's F no question that they are invaluable in merchandising retail space, the mere mention of the word can make the most seasoned merchandiser cringe.

Not only are planograms timeconsuming to prepare by hand, but as any store planner knows, the picture is only the beginning. The real challenge of planograms is in measuring and maximizing their results.

Yet there is a solution that has proven to be popular in hardware and home centers. lt's called computerized space management and performs such key functions as automatically creating planograms optimized on the user's financial goals, to managing store inventory and more.

Computerized space management began in 1974, when a mini-computer software program was developed for the food industry. The proliferation of personal computers in the early '80s led to the development of space management programs as they are today. Although the technology became more accessible, it was expensive. Systems typically started at $35,000.

New systems were developed to address a range of merchandising needs and budgets, including planogram services for companies who use planograms on an infrequent basis. In 1988 Handy Andy became the first home center to jump on board. Today, home centers using space management include Builders Emporium, Builders Square, Lowe's and Wickes Lumber.

The programs are not just for retailers. Space management is used by more than 60 manufacturers and distributors in the hardware and home center industries, including Cotter & Co., Liberty Distributors, Sentry Hardware, Stanley, National Manufacturing, Masco, Leviton and Moen/Chicago Specialty. The number of users is expected to continue to multiply.

Although space management is often thought of as computerized planogramming, it is a powerful tool that does much more than create pretty pictures. Space management works by using product performance data to determine the optimal placement and stocking quantities needed on the fixture in order to achieve the user's financial goals. A paper