As the world around us changes where immediacy of action is paramount. The way we do business must therefore change. It is no longer acceptable to create a business based on teams of employees who cannot work together for the mutual benefit of all stakeholders.
It is apparent that in the past, the customer service and credit or accounts receivable departments and accounts payable were basically treated as cost centres. Let us not beat around the bush, the cheapest possible cost was often the driver behind the thinking and resourcing of these areas. Worse still, their professional advice was often overruled by management, marketing and sales when it didn’t coincide with the objectives of these parties.
The only way to reverse that thinking with these departments is to revalue them as profit centres, rather than cost centres. Off course, this will mean identifying the factors that the departments acted upon to increase profits, reduce bad debts, credit claims and save on costs.
Today, your business’s stakeholder service ethos means that these departments are the window to your business operations because it allows:
- your customers and suppliers to see the quality and integrity of your business, and for
them to gain a level of confidence in that your business is a reliable business partner,
- your business to identify and eliminate mistakes to avoid unnecessary and unneeded costs, plus remove opportunities for customers to slow pay your valid invoices,
- provide different sales strategies to achieve another profitable sale, and the accounts payable and credit/accounts receivable departments to reduce frauds.
In essence, this means your business ethos will also need to create an environment where all the business’s employees are incentivised to work together for their mutual benefit and the business.
In today’s business environment where every profitable sale is essential, immediacy of response is paramount, your stakeholder service operations need to establish a structure, KPI’s and seek outcomes along the following guidelines.
First, a senior respected professional manager is required with the authority to make decisions. Preferably, they should be reporting to the Managing Director/CEO, because they will be authorised to take any reasonable action required to improve the business’s image of efficiency and profitability.
Second, these departments must employ professional and experienced personal who understand the big picture of business today, and the importance of every contact. They must also be fraud aware and be able to initiate actions that solve all enquiries as quickly as possible. The days of employing mainly inexperienced or unprofessional employees is no longer acceptable.
Your business’s suggested KPI’s must be based on these factors.
- All enquiries regarding sales or credit claims to be resolved within 24 hours, or the customer or supplier advised on why their enquiry cannot be completed within 24 hours.
- Documentation for new account applications, or extensions to existing contracts and terms, must be forwarded within 24 hours, and followed up with the customer if not returned within 48 hours.
- All credit claims are to be resolved with the customer within 48 hours.
- If a senior manager from another department is required to sign off on an invoice or credit claim issue, it must be completed within 48 hours. Should the enquiry remain unresolved after five (5) working days, the stakeholder service manager is empowered to sign off on the enquiry.
- All processed credit claims are to be reviewed monthly to ascertain if the causes of these claims are a result of a mistake made by the business or are an attempt by the customer to avoid paying any invoices within agreed trading terms.
If the above timelines are deemed to be impractical, it would be wise the remember that current research indicates your business’s stakeholders lack patience. Research on the internet suggests customers will walk away from a bad IT experience or poor customer service roughly 50 to 60 per cent of the time.Also remember, what we have done ourselves when we have experienced a lack of help or service. We too have walked away to a competitor or found a different solution. Our business stakeholders are no different.
Furthermore, we know correcting mistakes costs money, customers and profits. Mistakes, particularly those which keep reoccurring, give slow paying customers an excuse to avoid prompt payment, can be used by fraudsters to test your business’s systems, drive customers away, and cause troubles between departments.
Worse still, they cost money, the funds for which are required to replace this lost money, may not be available.
One of the key frustrations for your credit or accounts receivable managers is the extra work required when credit claims and invoice problems are not dealt with promptly. This extra work impacts on customer account reconciliations which take longer and become more complex. This wasted time could have been better spent liaising directly with customers about problems, dealing with unpaid invoices, or asking whether their business could work more efficiently with the customer.
In addition, one of the key aspects of gaining new customers and keeping existing customers is offering a distinct point of difference to customers over your competitors. Your marketing people are always looking out for any ammunition to make their marketing efforts more distinctive and attractive to your customers.
ChatGPT is not currently the best answer when looking at a stakeholder centric service. It may one day be almost efficient as people. At the moment, as most of have found, it can be a nightmare and a waste of time. Inevitably, on so many occasions after failing to obtain a clear response to our enquiries via a ChatGPT response, we repeatedly have to speak with a human.
In conclusion, the world of business has changed, as is every part of the world we live in has changed. Your business therefore needs to change and your business can no longer continue to operate as it did yesterday.
In today’s world of business, a lack of reliability, expediency of action and increased fraud are amongst the main issues creating business losses The answer to these issues lies in having a properly resourced stakeholder ethos focus. This focus will also be the window to your business’s quality and efficiency of its operations. In doing so, your stakeholders gain a level of confidence in that your business is a reliable business partner.
This ethos will help create every possible profitable sale, ensure your invoices are paid within agreed terms, and reduce losses from mistakes and fraud. In achieving these outcomes, your business will have every opportunity to survive, thrive and grow.
Want to know more, contact Kim at kim@creditmatters.com.au, or 0411 649 261, or have a look at what we offer via our website at www.creditmatters.com.au
