To Love What You Do
When we do business, we often put our focus on how to create sales and generate more money. If our customers are obliged to pay in cash, the sales we achieve will get directly into our account without us wondering whether our customers will eventually pay or not. It will be another story for business that sells goods and allows its customers to pay at a later date. The company will give payment terms to its customers whether it is 30, 60, 90 days, and so on.
There are companies that provide certain amount of credit limit the customer may use to afford goods they need even when they are running low in cash at the moment. For return, the customers have to pay their debt in time that has already settled in the first place. As there are no such free things in the world, the credit came with terms and conditions. The customers, or the debtors, in most cases have to pay the interest that compounds with the terms given. Some company who gives considerable amount of credit also put collateral as one of the terms and conditions.
As I said in most cases, there is also company that provide interest free credit to its customers and no collateral needed. How can it make sure that all of its customers, if not in time, will eventually pay?
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In the meantime, I am working on a topic that my college-year self would try to avoid: things that are related to finance. I like to see some cash in my wallet that I can use to buy some coffee in the middle of work, or to buy goods I’ve been wanting for times, but I don’t love them to that my dream is being a $ billionaire.
Ever since I was having an internship at a company that generously gives interest free credit and no collateral needed to its customers, I knew that I need to put more attention on money. If possible, I should try to concern more about the debts our customers have. Not only for the sake of company’s cashflow that will affect all of its employees, but also debts will cause burden and sin if ones carry it to death (at least that’s what I learnt from my religion education class in elementary school).
Engaged with collection team
When I finally decided on what my internship project would be, I was pretty excited that it was about account receivables management. I just knew how crucial to manage debts the customers owe us in terms of company sustainability. If we run out of cash then how can we pay for our operational expenses?
So in January 2021, I was lucky that I met the new collection manager in one of our business unit by the time I started working on this project. We had our first conversation in her first days at work. She told me about the collection practices in her previous companies and shared stories about how collection works at financial institution like bank or leasing company. I just knew that sending letters to customers in over due category is necessary to give serious notice while I thought everything would be easier to be done by email. I also learnt that sending proper reminder to customers matter to number of days the customers finally pay, counted from the invoice due date.
Together with collection manager and her team that has grown to the team of four at the moment, we design the new workflow together and implement the revamped tools that now can provide the information needed for collection team to get the invoices paid, dig deeper to customers’ hurdles for paying on time, and detect if there is a possibility of fraud. It may take a longer time for your user to get used to how everything works in start up environment, particularly if your user used to work with system that has already settled in the first place and the employee just simply need to follow the rules. Still by this far, I believe that persistence to achieve collective goals and direct assistance to ensure the work is kept effective and efficient can overcome the gap that exists in the first place.
Prevent the bad and non-performing, long before it hits the collection
From the meaning of its name, collection is the act of collecting. It is meant to be in the end of our customer’s journey. Collection team can send reminder message before due date, call for another reminder after due date, visit the customer in person, or negotiate the new payment scheme so that the customer will eventually pay. However, I remember of what one of product manager in the same business unit with the collection manager said about follow-up efforts by collection team. It only managed to solve half of the problems.
There are latent problems that should be anticipated long before the end of our customer’s journey. For now, it has already started from the beginning by assessing the customers’ creditworthiness based on many variables. Next, the assessment should be evaluated along the way, based on historical payment performance and behavior of our customers. In the near future, we as a company should be solid in driving the company towards our noble goals, to reduce social and economic inequality. It can be realized if we provide our service effectively, which means we give it to right man in the right place, and also take care of our company so we can create sustainable impact for the world.
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Aside from my explanation about how I avoid finance-related topics to work on, I am currently feel thrilled with what I’m working on. Although there are tons of what needs to be improved on myself, small wins matter. We start from little steps to achieve bigger and significant things. I need to pour more fuel and maybe some NOS to work faster. But first, I need to hear this reminder from Steve Jobs.
“The only way to do great work is to love what you do.”
That’s all from me, who’s trying to love more on what I do :-)
