The Credit Corner

By WlttlAM E. TOCKE

Bill hos foughf hundreds of independcntly owned firns, building supply outlels omong thcm, how to build solcs lhrough credit relling, ond how to collecl receivobles. Bill's progrom ofiers the deqler ord.his slofi on lhe iob credil lroining ond periodic supervision. He hor eorned o mosl envioble repulolion leoching ,,professionol credil monqgement" to progressive refqilers during the lost I I yeors of his totol of over 30 yeors in the field of retoil cnd consumer credit. For detoils wrife hin dirert, 3401 Bolboo Street, Son Froncisco 21, Colifornio.

I have watched many dealers become more and more liberal in granting credit, and allow their collection policy to slacken ofi, when sales decline. This is a serious mistake.

Usually, dealers guilty of such poor practice fail to recognize the importance of tightening up collection procedures if they decide to become more liberal in granting credit. The more liberal your credit granting policy the stronger your collection policy must be.

It is important to remember that sales fall off during certain periods of the year -for several reasons. One, customers have less money to spend on cash sales items, therefore, they have less money to pay off debts. The other reason is: some dealers operate in seasonal areas where their cus- tomers cannot work the full year. If collection procedure is slackened, the average debtor will interpret this to mean the dealer has either called ofi his dogs, or cares less whether bills are paid or not.

Once started, it is absolutely essential that a continuing flow of reminders and collection notices be mailed to debtors when their account reaches a certain state of delinquency. However, it is imperative that the credit executive determine which of the ttoverdues" are habitual "slows" who pay every month, but not by the due date.

Some debtors will resent most anv form of reminder or collection letter. I have had debtors become disturbed because we sent them a statement. We, in the credit field, often wonder why a debtor becomes disturbed because we ask for payment. We know before asking that we used the right approach and made every effort to collect and retain the customeros favor. Why then should a customer become upset and tell you so when all along he knew his account was overdue? Is it because he is eccentric, or does he become antagonized because he has no money and showing resentment is the only thing he has to save 'o[ace"? It's anybody's guess.

Why do I recommend routine collection follow-up procedure regardless of the time of year, and no matter whether sales are slow? Remember this: You can almost always add charges to a current account, but it's merely poor business to add charges to an overdue account. If the debtor cannot pay his overdue balance, by what stretch of the imagination can you believe he can pay for current charges.

Mooreheod's 5oih Anniversory

Charlie Moorehead, founder of Moorehead Lumber Company, Escalon, California, was guest of honor at a party thrown for him by his iriends, customers and suppliers on Saturday, October 5, in the offices of his 50 year old retail lumber business. Charlie still makes it down to the shop after a half century of retailing to advise Warren Moorehead in the management of the long established and successful San Joaquin Valley retail concern.

Whoiesalehardwoodsince I93i

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