The Collector And His Work
( Originally Published 1918 )
Modern collecting is done chiefly by correspondence. There are times, however, when collections are better made by personal visits, and personal effort is sometimes advantageous after the resources of correspondence have been exhausted. Collectors are therefore commonly found in the larger mercantile concerns, and also in some lines of business where special conditions require their employment.
In a business of any magnitude, the collection manager's time and attention is needed for more important matters than for the personal collection of ordinary individual accounts. Collectors must therefore be employed, and, as these are subordinate to the collection manager, they are usually employed by him.
Qualifications of a Collector
The collector should have some business experience and a sufficient knowledge of bookkeeping to enable him to keep an accurate record of what he collects. In appearance he should be neat, as in his interviews with customers he represents the house, and will represent it more adequately, be treated with greater respect, and se-cure better results, if he is properly dressed. People are inclined to resent requests for money. Hence, the collector must be able to approach them tactfully. He must, as a matter of principle, be courteous, and at the same time must also be firm. He must have sufficient intelligence and knowledge of human nature to make a study of each customer and decide the best line of approach. Also, he must possess a large amount of patience and persistence; as many debtors, apparently hopeless, will, if followed closely, make payment at last.
It must be confessed that the collector must not be too thin-skinned. A sensitive man does not make a good collector. Be he tactful as he may, the persistent follow-up, which is part of the collector's duties, will occasionally offend; and he must then be able to meet the reproaches and perhaps the abuse of delinquent debtors with dignity, with proper but not offensive independence, and without humiliation.
The successful collector must be honest. To promote his honesty it is wise for the house to require a bond, even though it pays the cost itself. When a bond is required, the collector will feel in a way that he is pledged to honesty, also that his movements are subject to the scrutiny of the bonding company. If he is honest he will not object to this, for there is nothing for scrutiny to discover. If he is not honest, the knowledge that he may be watched tends to make him honest—at least as to his collection moneys.
The collector must also be energetic. Energy, as considered from the standpoint of the collection department, is ability to get work done; to put things through —not merely ability to call, but ability to call and come away with money, or with the debtor's promise either to pay on some definite date, or to come round for a personal interview with the manager. Results are what the collection manager wants, and results are not secured by sitting down and waiting for them to come round.
It goes without saying that the collector and the collection manager must be in entire harmony with each other. The collection manager cannot produce proper results if his subordinates do not cooperate with him. If, therefore, the collector persists in disregarding the wishes of the collection manager and does not carry out instructions, the only thing to do is to get another collector who is better versed in the requirements of team work.
It is sometimes difficult to find capable collectors ; but not infrequently first-class men who could not otherwise be secured, will take a collector's position for the sake of the outdoor work. In these men, whose health will not longer stand the confinement of office work, the manager often finds collecting ability of a high order, made more valuable by a thorough office training. Such men cannot be regarded as inexperienced, even though the actual work of the collector be new to them. With a little advice and help, they can usually take hold and relieve the collection manager in a way which would be impossible for a really inexperienced man.
The question of the collector's compensation will be decided by the house. A good collector can earn from ten to twenty dollars a week—oftentimes more. An excel-lent arrangement is to pay the collector a nominal salary, and a commission on all he collects each week above a certain amount. This adds greatly to the interest of his work and also to its results.
In employing collectors, look well to their references, and make careful inquiry into their family history. Much information can thus be obtained as to their honesty and ability. A bond should, as stated, always be required; and the fact that the collector is accepted by a bonding company is pretty good evidence that he is honest, as the bonding companies look up the applicant's record very thoroughly before assuming any risk.
When a collector is once employed, he should not be discharged, nor should a new man be brought into his place, without the best of reasons. The knowledge the collector has gained of the accounts and of the customers of the house enables him to accomplish a great deal more than is possible for a new man. Also, it is not usually advisable to take the risk of this information going to some competing house.
The manager should realize the importance of starting his collectors right. The necessity of systematic work must be impressed upon them; and they should be made to feel that the manager is ready to give them advice when they are in trouble, and to stand back of them in all their efforts. The collector should also acquire a general knowledge of the business, not that he may make sales, but that he may be able to discuss its accounts and its affairs, when necessary, in an intelligent manner. It is obvious that a man who is not familiar with the details of the business is at a distinct disadvantage in meeting the protests, the objections, and the evasions of delinquent customers.
A man new to the collecting business must have training and some experience before he can handle much work. On the other hand, it often proves more satisfactory to employ a young man inexperienced in the work than an experienced collector, as the inexperienced man will be freer from bias, quicker to adopt new methods, and more likely to carry out instruction.
Honesty of Collectors
The collector should be impressed with the responsibility which attaches to handling other people's money. Too frequently collectors are—or become—dishonest, and misappropriate both the concern's time and its money. It begins, perhaps, with little irregularities. The collector takes time on his rounds to attend a horse-race or a ball-game, or he stops work to play a game of billiards or pool. Gambling almost inevitably follows, and small bets lead on to larger, until the collector begins taking the concern's money in order to pay these gambling debts. In the early days the "beginning" defaulter takes this money with the intention of putting it back; but, losing continually, he is soon so badly in debt that repayment is impossible, and the end is only a question of time.
In addition to the safeguard of the bond, some very careful system of checking the collector's work should be employed. The collector may perhaps have reported a promise to pay when in reality the money has been paid to him already. If there is a suspicion of this, and especially when the amount is large, a letter should be written to the debtor stating that the house is relying on receiving his payment on the date it is promised. If payment has not been made, this will help the collection eventually; but, if the collector has received and kept the money, the debtor will very promptly institute inquiries to find out why he has not received credit. It may aid the collector to let him know casually from time to time that such letters are being sent out as a means of helping his collections. He will then not dare to withhold funds which do not belong to him, as he will suppose the same method is followed with all accounts, or, if not, will be unable to tell which accounts are thus followed up. The condition will thus act as a check on his entire work.
The collector should make a report of the amount he brings in each day, and this report should be filed away for reference. Praise when he makes a good record, pleasant comment when the record is poor, will stimulate him to his utmost. The mere knowledge that what he does is watched and appreciated, when it is worthy of appreciation, will be a distinct encouragement. He should be led to feel that there is a future to his work, and that, if he makes good as a collector, there is more pay and a better position before him.
The Work of the Collector
The collector's work is distinctly the collection of debts. If he gets prospects, he can turn them in to the sales department. He should not be allowed to make sales. If he has the selling instinct too strongly developed to be suppressed, turn him into a salesman, but do not let him be both collector and salesman. Sales and collections do not work together to advantage.
While collectors cannot sell to advantage, it is equally true that a salesman cannot collect to the best effect. He cannot advantageously use the arts of the salesman to persuade a prospect into buying goods, and then—transformed into a collector—bully him, as is sometimes necessary, into paying for them. He may do it once, but on his next trip as a salesman he will find himself heavily handicapped. The salesman-collector might be capable of playing the double part indefinitely; but the customer is apt to object.
Under some circumstances, as, for instance, where the distance is great, and frequently in small businesses, the salesman must perforce act as a collector also. The salesman-collector will not, as a rule, collect as effectively as a collector who is not a salesman; but he should do fairly good work at least, and, when payment cannot be se-cured, should always be able to find out the reason for this non-payment.
The collector must believe thoroughly that he is going to get his money, but he must not be too optimistic about getting it quickly. He should understand that he is to give time enough to every debtor to get the money, or to find out why he cannot get it. He must, nevertheless, under-stand that he is not to become too familiar with the customers, nor to lose time and endanger his efficiency by visiting with them too freely. It is very difficult to force payment from a friend.
Above all things the collector should never get angry himself, unless he does it as a collection measure with intent. He must also prevent the customer's losing his temper, if possible. This holds true even in the temper-trying operation of the "sweating process," when the collector calls on the debtor with the intention of staying until he gets his money—going carefully over the facts of the case, pleading, threatening, and bringing every possible pressure to bear in order to attain his end. Under such circumstances the debtor will naturally be greatly annoyed, will sometimes becomes violently angry and insulting, will use every device to discourage the collector and to avoid payment, but will, on the other hand, not infrequently pay up just to get rid of his tormentor. The strain upon the collector is, however, even greater than upon his victim, and a successful "operation" requires a self-control, a resourceful skill, and a persistence, that are found only in the more able and experienced collectors.
When the collector finds a debtor cannot pay, he should get some definite promise for the near future. He should also find out what the debtor's resources are, and get such information as he can about his general financial condition. Sometimes in very difficult cases it may be wise for the collector to take an attorney with him, and, should the debtor be unable to make payment at the time, persuade him, if possible, to give a note secured by a real estate mortgage, or as a last resort by a chattel mortgage. If he consents, this is drawn up then and there, and, as soon as signed, gives additional security, and enables collection to be made through the courts, if necessary.
Debtors are frequently out when the collector calls, and some of them cannot be found in business hours at all. A collector who is really interested in his work and who expects to make a success of it, must be willing to call on such accounts in the evening or early morning, or whenever they can be found. When a debtor is not at home at the time of the collector's call, he should leave a note under the door, stating that he has been there, and asking the debtor to see the manager at the store. Every time he calls he should either see the debtor or leave something to show that he has been there. Some-times the mere number of times the collector has called will shame the debtor into paying.
A difficult and important work frequently assigned the collector is the tracing of debtors who have moved without notifying the house of their new address. In many cases this omission is merely an oversight on the customer's part, but occasionally it is done with intent to defraud. In such work the collector must assume the role of a detective, making inquiry from next-door neighbors, from neighboring stores, and from anyone else likely to know where the debtor has moved. By such inquiries he may discover the debtor's new address, or perhaps can ascertain the name of the transfer company which did the moving, and through this company discover the missing trail.
When two or more collectors are employed in handling city accounts, the town is usually divided in sections, each collector confining his calls to those customers who are in his own division. When a firm operates branch stores, each store, as a rule, has its own collector or col-lectors, who call on all customers in its territory. The traveling expenses of such a collector, and the time consumed, will obviously be much less than in the case of a collector sent out from the main office.
It frequently occurs in out-of-town accounts that an overdue amount is a small one—perhaps but a few dollars—and not enough to justify a special call. In such cases the collector should keep the account in mind, and call whenever he is in the locality of the debtor. The amount will not justify a special trip, but this continual incidental calling will usually secure payment. The debtor sometimes pays for the sole purpose of stopping the col-lector's very annoying visits.
The collector should, as a matter of course, always promptly report any change of address on the part of debtors. Such changes are continually occurring, especially with the smaller accounts, and are for the most part in good faith and without intention of evading payment. If, however, they are not reported and recorded, the effect is the same as if evasion of payment were intended.
Collector's Daily Report
Each day the collection manager will give the collector a certain number of unpaid accounts, which he is to route in a systematic manner, so that they may be covered with the smallest loss of time in getting from place to place. At the end of the day the collector should be required to turn in a daily report showing exactly what he has done. A card may be used for this purpose and the report should be very simple. The following is an excellent form :
LEDGER NAME OF CUSTOMER ADDRESS AMOUNTCOLLECTED REPORT
Each card, as handed to the collector, has on it the names and addresses of the customers on whom he is to call, and also the ledger folios of the accounts. The ledger folio is for bookkeeping purposes and does not directly concern the collector. The customer's name and address gives the collector his working instructions and enables him to route his day's work to advantage. The amount collected is an essential feature of the report, serving both as a record and as a check on the collector.
The report provided for in the last column of the card is an important feature. If payment has not been made, this report must be definite, stating the exact date when the debtor promises to pay and his reasons for not paying at the present time; also any other information, such as change of address, etc., which will be of use to the collection department. The card does not give much room for verbiage; hence, the collector must be taught how to report in the fewest possible words that will bring out all the facts. Much information can be conveyed in a ten-word telegram, and the collector should phrase his report in the same "telegrammatic" language. This method saves time both for the collector and the manager. The style is not difficult to acquire, and its value is well worth the effort.