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It’s no surprise that a majority of business owners and their staff hate having to call a customer for money. Most people end up in that position by fluke or accident. “Mary, you do an outstanding job on our payables. Would you mind calling XYZ customer for me?” the business owner has just placed, what could be their biggest asset, in the hands of someone who is scared to death to pick up the telephone. Is this a good idea? Maybe, but more often than not - no.

Recent studies have demonstrated that the cost of hiring the wrong person for your job could cost you anywhere between 1.5 to 3.5 times their annual salary. Thus, when you hire the wrong credit analyst earning $50,000, the real cost to your organization will be $75,000-175,000.

As you can see by the staggering numbers above, hiring the wrong employee can severely hobble or kill your company, so it becomes critical that if you are going to delegate the job to someone internally, or hire your first receivable clerk, that you find ways to give yourself the best chance for success. Consider the following points when hiring your accounts receivable staff: 

 

Evaluate Current Skillsets. Are Untrained Staff Managing Your Largest Asset?

If you check out the help wanted ads, they are chock-full of employers looking for new collection and credit staff. We regularly see advertisements for new staff from the same companies every month. Turnover in any employee position is expensive. However, the turnover of credit and collection staff can be catastrophic if not caught and corrected. Competency of management staff is critical for training junior staff.

Analyzing your present accounts receivable staff will reveal gaps. Sometimes rearranging staff duties will free up a budget to hire the staff really needed. New staff should bring experience and solutions for your accounts receivable.

 

Look for Enthusiasm. Low Job Engagement = Big Problems in Accounts Receivable and Credit

In most small and medium sized companies, the accounts receivable clerk was recruited from another department or got the job by accident. If you were to ask these credit clerks if they actually enjoy their work – most will answer with a resounding NO! Employee turnover in this position is extremely high.

Turnover can be reduced by having a pre-defined idea of the type of person you want to hire. Believe it or not, a position in accounts receivable for some people is a dream job. Look for that spark of enthusiasm when screening applicants for accounts receivable staff.

 

Be Strategic with Advertisements and Specific with Key Performance Indicators (KPI’s)

So how do you attract and retain quality collection and credit staff? It all starts with your advertisement. Workopolis, Monster, LinkedIn and Indeed are popular help wanted sites. Firms like Robert Half and Mercer Bradley can help you with recruiting as well.

Your advertisement is critical. Be specific about the job expectations. Post the salary or the hourly wage. Let people know exactly what they can expect. Pre-qualify candidates to make sure they possess the qualities of top credit and collection professionals. There are several pre-employment tests that can be administered to help you short-list candidates for a specific position in accounts receivable.

 

Take Your Time Vetting Candidates

Ounce of Prevention vs. Pound of Cure. Once you have posted your advertisement, be sure to pre-qualify candidates well and give thoughtful consideration to the job requirements. These days checking previous employers and resume references are almost a waste of time. We recommend speaking to a former CFO or Credit manager to get feedback. Ask the tried and true questions –

• Was the candidate able to troubleshoot and reconcile customer accounts?
• Were they able to bounce back easily from rejection?
• Did the candidate escalate issues to sales staff or senior finance?
• Would you hire the candidate back?

If there is a moment’s hesitation, you should probably dig a little further. Try speaking to someone other than the candidate previous supervisors, sometimes valuable information can be gleaned from an innocent conversation.

Attracting and retaining the right collection and credit staff is critical to your firm’s financial success. Don’t leave it to chance otherwise you can expect the same results with your accounts receivables.

 

Blog post submitted by Chamber member Priority Management Corp.