Most business owners think the sales people in their company are there to make sales, that's it.The sales department doesn't have anything to do with the accounts receivable functions or the credit manager's job or anything to do with money once they make a sale.
Wrong.
It is very important that you utilize your sales staff when you have past due accounts. Each account should have a note advising who the sales person was for that transaction. If your sales department is on the ball there won't be many accounts that are past due because they would have gathered all the information they needed BEFORE the sale to make sure they did not oversell. When sales oversells to a customer who can't afford it, it is almost the same thing as the subprime mortgage issues you are reading about in the news! Make sure your sales staff is NOT doing this!
When an account becomes past due, the first step you should take is to contact the sales person and have them contact the customer to find out what the problem is.
If the account continues to be past due, you should withhold any commission this sales person would have received if they had finished the transaction. Once the transaction is complete (you get paid) any commissions can be paid. Why should you take the money out of your pocket to pay a commission to someone when you have not been paid for the service or product?
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