Should Salespeople Support Collections? Why Sales and Finance Should Partner on Payments

Collections are a bit more of an outlier. They can be messy, especially when aging keeps growing. So, should media companies let sales and finance share the responsibility for collections?

Yes, but you’ll need rules, technology, and open communication to make it work.

Sales Once Had a Strong Role in Collections; Shared Services Made it More Challenging

In reviewing this fundamental question, I chatted with a media collections expert and fellow MFM editorial board member, Robin Szabo, President of Szabo Associates. His many years of experience allowed for enlightenment on the subject.

“Sales, historically, always played a part in the collections in the media industry. Now, it varies. With shared services becoming part of some operational models, these partnerships ended,” Szabo noted.

Shared services models have been a trend in some media companies. It describes the consolidation of similar functions into one body that provides these services – in this case, financial – for the larger organization.

We also discussed the impact of collections on sales teams. “Sales may be more involved when there’s the threat of a chargeback on their commissions. However, they’re a busy group. In terms of customer relationships, though, they hold the key,” he added.

No one would argue the point of who holds the best connection to customers. Some salespeople have yearslong relationships built on mutual respect and trust. The idea that those relationships could crumble because someone in finance doesn’t know the whole story could be disastrous.

When longtime customers suddenly have a payment problem, sales should take the lead. They must gather the facts and inform accounting before any other communication reaches the client.

Finance Doesn’t Always Understand the Modern Realm of Local Media Buys

The products media companies sell have become more complex. Digital advertising is a unique revenue stream that doesn’t have the same workflows as traditional spots. Margins for digital are typically lower, as the cost of goods sold (COGS) is higher. Profitability in digital continues to be a concern for these organizations.

There may be little transparency in this model, and sales can certainly educate finance on how the terms might be different. That could be especially true for customers launching their first digital campaigns. Sellers have worked long and hard to get the sale, and payment terms may be exclusive to the opportunity.

When sales and finance have open communication and expectations, they’re more likely to collaborate in harmony. Business managers who only see the numbers don’t have visibility into the sales process or relationship. Sales teams have a responsibility to educate them.

Finance Doesn’t Lose Control When Sales Helps with Collections

Business offices, especially those that are centralized, likely have concerns about “control” around collections. They may have no connection to local offices, so they treat every past-due invoice the same. Szabo shared, “Finance doesn’t have to lose control. They can benefit from communication with sales teams.”

Lack of interaction between these groups means no one has complete visibility. It can cause the blame game and create antagonism. That’s not a healthy path to take for revenue – or anything else.

Finance may have opportunities to empower sales to help them, ensuring everyone has clarity around efforts.

Making it Easier for Sales to Help with Collections

Everybody at every station is busy. There’s no time for manual report generation and explaining aging, though some organizations may still do this. Accounting prints out aging reports, providing each seller with their accounts. This process can take hours, and the data isn’t in real time.

New tools are now coming to the market that address the need for real-time accuracy of information. Traffic and payment portal ecosystems now have collections tools solely for account executives. Marketron just debuted a solution for our users, designed based on customer feedback and industry knowledge.

The AE logs in to the system and can view all outstanding invoices for their customers. It displays what’s past due, the status of pre-payments, credits to apply, and whether the customer is an electronic payments user.

Sales staff can then email or call customers to check on balances, send them links to guest checkout, or process payments on their behalf. When a payment action occurs, the aging report automatically updates.

Finance still has ultimate control with restrictions by salesperson or station. AEs have accurate information and can be the bridge between them and accounting. Engagement will be stronger with sales involved because the client is much more likely to answer a call or read an email from their AE rather than someone they don’t know in the business office.

On the Same Team

Sales and finance have similar goals but different motivations and expertise. When they work together to clean up collections, it’s a much more impactful process that delivers better results.

For success, start with the basics of communication and how you’ll share information. Define the rules of these plays for all parties, and adopt technology that supports this partnership. Through true collaboration, sales and finance can reduce days outstanding and secure more reliable cash flow.

This article was written by Beth Osborne, who leads content strategy and execution at Marketron. She’s been a professional writer for over 20 years, helping tech and software companies tell inspiring stories.

Posted at MediaVillage through the Thought Leadership self-publishing platform.

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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.org/MyersBizNet.