Masonry Magazine July 1964 Page. 14
Credit
Corner
By
William E. Locke
I received the following inquiry from a California contractor several months ago: "We charged off $45,000.00 in 1963. Can you help us solve our credit problem?" This sum, hard earned dollar profits charged to bad debt as uncollectable and most of it turned over to a collection agency.
A scheduled six day survey of this contractors sales and credit sales function revealed the problem. Every department head was responsible for increased sales, departmental control of staff, inventories and outside salesmen and estimators, but no one ramroding the credit department. The controller did the best he could with the limited time available.
After careful ageing of receivables, and account classification, computation of all service and contractor accounts showed over $650,000.00 on the books, over 50% delinquent. Our contractor friend was in a familiar credit jungle. He had an excellent sales force, which it usually takes to create a credit problem, but he had too many credit managers, and there wasn't a trained credit man in the lot. He should only have had one credit manager.
I'm happy to say, credit granting and collection procedures that are to be found in any firm where profitable credit granting procedures are the rule, were gratefully accepted, a credit manager was started, and a collection policy was adopted that resulted in over $16,000.00 collected in 90 and over 90 day accounts the first month. Top level management now agree that the sale is not completed until the cash is collected. It's not what is done to collect, rather how it's done. The easiest way to collect money is ask for it.
Let's assemble some facts: If you are a contractor, prime or sub, and are tired of being an unwilling Santa Claus, and have plans for expansion, outside investments and family security, take a look at your receivables. Determine the value of each account as to its potential worth to you as a credit customer, see that your staff is trained in credit sales, and then decide what action, if any, is needed to give you business security. Surely, there is very little security in risky accounts receivable.
If you have any questions about credit management, write me direct for a reply at no cost to you.
This month masonry is pleased to present to you the first in a series of articles by William E. Locke. Mr. Locke has taught hundreds of firms how to increase sales through better credit merchandising, and how to grant credit and improve collections by modern methods. His program is one of management and training. No collection agency is involved. For details write him direct. He will also answer your questions in this column. William E. Locke, 3401 Balboa Street, San Francisco, Calif. Mr. Locke will send you a copy of his "Credit Managers Notebook" on a 10-day free trial. Copy of this widely accepted suggested credit department only $12.50.
Reopen Chattanooga Plant
The Koehring Division of Koehring Company, Milwaukee manufacturer of construction machinery, has announced that it will reopen its plant at Chattanooga, Tennessee.
D. W. Marchant, President and General Manager of the Division, explained that increased demand for the firm's new all-hydraulic machines has overloaded the facilities at Milwaukee. The plant at Chattanooga will be used initially for the manufacture of Kochring's standard ine of Cranes and Excavators. "In this way," Marchant went on to say, "the Milwaukee plant will be able to concentrate on the manufacture of the all-hydraulic SKOOPER and 505 Hydraulic Hoe to reduce the order backlog for those machines". In addition, the local plant will produce new machines now being considered and developed. Employment in Milwaukee will not be affected.
General Manager of the Koehring Southern Plant will be D. J. Harsh presently General Superintendent o the Milwaukee plant. His Plant Superintendent at Chattanooga will be James Robertson, who is now a plan foreman in Milwaukee and originally a Chattanooga resident.
Thank heavens this country is still free and men can do as their wives please.
Prize Tightwad: The father who scolded his little boy for buying a all day sucker at four o'clock in the afternoon."