Q please share the exit policy for FMCG industry in sales for seniors and juniors when outstanding dues are held in the market?
From India, Gurgaon
From India, Gurgaon
Dear Kavita,
There is always a risk of doing a credit sale. Not all customers pay their dues on completion of the credit period. A lot of follow up is required. Recovering the dues from the customers takes a toll on the time of the salespersons or the recovery executives. However, when the credit is given to the customer, the salesperson does not do it in his/her personal capacity but on behalf of the company. Therefore, if a salesperson quits the company, the newcomer has to do the job of the recovery of the dues.
If the recovery of the dues is linked to the exit of the employee, then the salesperson might have to extend his/her stay in the company. Under such circumstances, will the company pay the salary to the employee in an extended period? By the way, during the extended stay, what if a still more amount becomes due to be collected, then the salesperson will have to chase a new target for the recovery. This could go on endless.
Because of the fear of the delay in the collection of the dues, what if the salespersons stop extending the credit to the customers? This could deprive the company of the revenue which could have even during the extended credit period.
Nevertheless, one who does a credit sale has to recover the dues also. To make the salespersons accountable, you may start calculating the Account Receivable Turnover Ratio (ARTR). Calculate this ratio for the last five years. Later, conduct the brainstorming session with the salespersons on how to increase the ARTR. Whatever the collective decision is taken, record the minutes and take the signature of each salesperson. Their involvement in finding a solution will increase their accountability.
Thanks,
Dinesh Divekar
From India, Bangalore
7883There is always a risk of doing a credit sale. Not all customers pay their dues on completion of the credit period. A lot of follow up is required. Recovering the dues from the customers takes a toll on the time of the salespersons or the recovery executives. However, when the credit is given to the customer, the salesperson does not do it in his/her personal capacity but on behalf of the company. Therefore, if a salesperson quits the company, the newcomer has to do the job of the recovery of the dues.
If the recovery of the dues is linked to the exit of the employee, then the salesperson might have to extend his/her stay in the company. Under such circumstances, will the company pay the salary to the employee in an extended period? By the way, during the extended stay, what if a still more amount becomes due to be collected, then the salesperson will have to chase a new target for the recovery. This could go on endless.
Because of the fear of the delay in the collection of the dues, what if the salespersons stop extending the credit to the customers? This could deprive the company of the revenue which could have even during the extended credit period.
Nevertheless, one who does a credit sale has to recover the dues also. To make the salespersons accountable, you may start calculating the Account Receivable Turnover Ratio (ARTR). Calculate this ratio for the last five years. Later, conduct the brainstorming session with the salespersons on how to increase the ARTR. Whatever the collective decision is taken, record the minutes and take the signature of each salesperson. Their involvement in finding a solution will increase their accountability.
Thanks,
Dinesh Divekar
From India, Bangalore
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Exit Policy.xls
EXIT INTERVIEW POLICY.doc