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Is collecting receivables after closing sales the responsibility of the sales department or the finance/accounting department? To what extent?


Topic Expert
Doug Thompson
Title: Director of Revenue
Company: Castlight Health
(Director of Revenue, Castlight Health) |

Finance should own the process of tracking receivables and flagging any potential issues. However once a problem has been surfaced by accounting, sales usually has a responsibility to take action to collect, unless there is a separate customer Account Management department.

Under many commission plans, sales people are only paid when the customer pays.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

There was a recent thread on this at
which may provide some feedback for you

Bradford Marcus
Title: BDO/Account Executive
Company: Atwell Companies, The
(BDO/Account Executive, Atwell Companies, The) |

It should only be the responsibility of the finance/accounting department.
The sales department's job is to bring in more business. Trying to collect delinquent invoices takes valuable time away from what they should be doing. Letting your sales department try to collect reduces their effective with their clients.
The clients will then avoid and not answer calls and emails.

Once the account becomes 90 days past due it should be sent to a collection agency. The longer you wait, the less probable you are going to get paid.

Todd Wilen, CPA
Title: Director of Financial Reporting
Company: Toll Global Forwarding - Americas
(Director of Financial Reporting, Toll Global Forwarding - Americas) |

If the account is difficult to collect on and Sales can assist especially if they see the customer on a regular basis, then Sales should assist. After they have made a last ditch effort, the account should be placed for collections.

Michelle Jones
Title: Bookkeeper
Company: Ciao Bambino
LinkedIn Profile
(Bookkeeper, Ciao Bambino) |

We've done it both ways in our company over the years. We discovered that the sales people don't want to be the bad guys with their clients so they end up either not being effective, or not doing it at all, even with training on how to collect with a soft approach. I also agree with Bradford Marcus in that the sales team needs to focus on bringing in more sales.

We do, however, discuss the account with the sales reps before sending it to collections to see if they can provide any insight to help the collection process. It's at this point that a sales person may choose to make a call to their customer contact, which, in larger companies, will be a different person than the accounting department has been contacting. This has proved to be very effective.

Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

How you collect and who you assign to collect largely depends on how you view your "Sales" Department. Sales is different from Account Management. Account Management is from cradle to grave while "Sales" is just well..."cradle". Account Management means that they are still responsible to help in collection UNTIL there is a decision to involve a collection agency. Even then, Account Managers are still responsible for collection agency coordination/strategy and also some clean-up (back-end) work as far as the company is concerned.

Bradford Marcus
Title: BDO/Account Executive
Company: Atwell Companies, The
(BDO/Account Executive, Atwell Companies, The) |

Accounts Receivable payment is the responsibility of the Controller, Credit & Collections Manager, Account Receivable Manager or Accounting Manager depending on the size and structure of the company. Account Managers must be advised of status and pending actions but usually are not responsible for collection agency coordination. The most they should do is make ONE phone call (most likely to senior executive) to the debtor. Their job is to manage the account to get more business. Having them call sours the relationship.

If your company no longer wants to do business with the debtor then an Account Manager is certainly not the person you want calling.

Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |


As a BDO/AE, I understand where you are coming from and I am not surprised by your position. What you are describing is Sales Management. As you said...."Their job is to manage the account to get more business". Sales Management is just a portion of Account Management.

It all depends on the size and complexity of the organization. For the most part Controllers, Accounting Managers, Accountants are responsible for PROCESSING payments. The best they can do is establish a relationship with their counterparts and follow up (1 or 2 calls) when payments are missed. But when it has become a problem, then the Account Managers should step in to see what can be done. It is also RISK MITIGATION because it allows the Account Manager to reevaluate the account as late payments are usually an indication of bigger problems. If the Account Manager was not involved, the company would have just continued doing business as usual (and in fact as you said even doing more) with a company that is showing symptoms of distress.

I have been an Account Officer for banks and my responsibility does NOT end when my client borrows. It is Relationship Management...and "relationship" includes everything . I am the point man for the bank for whatever happens to that account from presenting it for approval. getting more business up to until it is paid off, collected or written off (hence, cradle to grave). I have also been on C positions that deal and managed Sales/Marketing guys with varying concepts of how sales, marketing, account management operates..

Sales is sales and Account Management is cradle to grave. And there is NOTHING wrong with either of those choices. It is just a choice of a company on how to structure the organization and how they can deliver value to their customers/clients.

David Cole
Company: Haines, Isenbarger & Skiba LLC
(CPA, CVA, CRFAC, CGMA, Haines, Isenbarger & Skiba LLC) |

I always felt that when the customer sees my salesperson, that it was about selling or buying. I didn't want them wondering if they were there to collect money or to sell. But, when we were having difficulty collecting, at times the salesperson can connect the customer's purchasing people to the payables people so that purchasing could remind payables that we were a good partner that needed to be taken better care of. Many times Purchasing is unaware of what Payables is doing and the salesperson can assist.

(Human Resources Manager at Crafts Americana) |

I agree with David's comment above. At my company, it is ultimately AR's job to collect. When AR lets the sales manager know about seriously past-due accounts, they partner to bring the account up to date. Sales built the relationship with the customer, and to look the other way when that customer is in trouble almost always results in damaged relationships and lost future sales.

(CFO/Board Advisor) |

There isn't a one size fits all answer to this question. In my experience (35+ years) collection problems need to be broken into categories:

1. "True" credit issue: the inability to pay; customers with financial problems; and just unwilling to pay. These should be dealt with by the Finance/Credit folks. In my career, these situations are very much in the minority.

2. Product problems, billing (paperwork) issues, what was sold wasn't what was delivered. These are problems where a customer is "withholding" payment. The customer has the ability to pay, but there are other problems which need to be resolved, e.g. what was sold and what was delivered aren't the same; product or service issues; and plain old fashion paper work issues like the quantity or price of what the customer ordered and what was actually delivered are different. By far these are the majority of collection issues. In these situations, Sales/Account Management needs to step in and resolve. But in order to do this, Sales must have the authority to correct the customer's grievance. This is where the bulk of the issues lie.

As a side comment, and we've all experienced this: How many of your difficult collection accounts are the result of shipping product or delivering services at month/quarter/year end to customers with marginal or poor credit profiles, which the Finance/Credit pointed out, but which were over-ridden by "Management" in order to meet a Forecast or some other expected result?

Here's my point, Collections are a Company issue, and should be addressed by a Team: Sales - Operations - Finance.


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