Customer information--current, complete, and conveniently available right at your fingertips--is one key to successful collections. Another is a method of systematically organizing your efforts so that every delinquent is contacted on a preestablished schedule. Here's how a computer software package is providing both the information and the method for one company. In the eternal debate over the relative merits of the collection letter and the collection call, Ronald A. Sereika, CCE, comes down squarely on the side of the telephone.

"The only time I send letters to customers," says the corporate credit manager of Schlegel Corp., a Rochester, New York, subsidiary of the British comglomerate BTR, "is when I'm confirming agreements that I've made with them." It is not the telephone alone, however, that has had what's been described as a "stunning" effect on the division's DSO performance. It's the powerful combination of the telephone and the computer. Sereika has installed a collections software package that contains complete customer information related to the credit and collections process. This include the customer's name, Schlegel's customer number, the customer's phone number, the account payables person's name and phone number, and the buyer's name and phone number.

1. Each time Schlegel invoices a customer, Sereika enters that customer's number into the database for 40 days ahead. (The company's terms are net 30, and Sereika's program involves placing the first call to customers 10 days past due.)

2. Each night, the computer prints out a list of customers (by customer number) who were
   • invoiced 40 days previously as well as those customers who were
   • called about payment seven days earlier and promised to send checks.

3. When Sereika arrives at his office in the morning, the list of all these customers is sitting on his desk. The first thing he does is check the computer for posting information--to see which customers on the list have already made payment. He crosses these off the list.

   Along with names and numbers, the system contains any and all notes from previous telephone conversations with customers. 'We have the material available, but I see that your account is past due. Let me switch you to the credit department.' -- Ronald A. Sereika, CCE

4. Next, he assigns the remaining customers to his three collectors and to himself:
   • First calls he distributes randomly to any of the three collectors.
   • Second calls (payment not having been made as a result of the first call seven days earlier) Sereika gives to the collector who made the first call.
   • Third calls (payment not having been made as a result of the first two calls) Sereika handles himself (discussed in more detail below).

5. Once the customer numbers are distributed, the calls begin. "Our software package is tied to our mainframe, so it is driven off the customer number," he explains. "We need only to key in the customer number on our PC, and it brings up all of the information on the screen."

• Emergency orders. Schlegel's customer service department is also linked up to the computer system. If a customer calls to place an emergency order (e.g., "My inventory people messed up, and I need two boxes of _____ shipped overnight, or I'll have to shut my line down"), the customer service representative will bring the customer's account up on the screen.
  If the customer is delinquent, the representative will explain, "We have the material available, but I see that your account is past due. Let me switch you to the credit department."
  At this point, Sereika or one of his collectors will talk with the customer. The conversation may go along the lines of, "I talked to Jerry in your accounts payable office two weeks ago, and he promised to send a check, but we've never received it."
  The customer will then need to either confirm that a check has already been mailed (the check number, the amount, and the date it was mailed) or make arrangements to overnight a check to Schlegel.

• Customer visits. If Sereika happens to be visiting a customer, and one ofthe company's executives complains about orders being held, Sereika can press the "Print" key on his laptop and print out a history of collection contacts for the last 18 months. He can then present this to the executive, with the comment, "Over the last 18 months, we had to place 73 calls to your company for payment." The printout also lists the people who were contacted and the promises they made.

• Top management contacts. As discussed earlier, Sereika personally takes over calling a customer once a second call has produced no results. At this point, he works his way up the customer's management ladder, and may even end up talking with the president.
  Again, he has all of the relevant data at his fingertips and can report, "The last time, it took 78 days to get paid. We made seven phone calls, and I had to go all the way to your controller."