What I Learned About Credit Control From: How To Win Friends & Influence People (Part 1)

4 min read

Amazing credit control advice can be garnered from a great deal of sources. In this post I’ve taken a look at the world-famous self-help book How to Win Friends and Influence People by Dale Carnegie and how it’s timeless advice can be leveraged by finance teams to achieve an amazing credit control function.

First published in 1936, Carnegie’s book has dominated sales charts for decades, currently sitting in Amazon’s 20 best-selling non-fiction books of all time. He may have been born a poor farm boy, but Dale Carnegie went on to be an excellent salesman. You might be thinking “Hey, I’m trying to learn effective credit control here! The sales have already been made!” But that’s exactly what Carnegie was on to - the techniques that make a great salesman can be employed beyond shifting products. They can be used to to sell an idea. A concept. Anything.

Let’s use them to sell your debtors on the idea of paying you in a timely fashion.

Fundamental Techniques in Handling People Debtors

In the opening section of the book, Carnegie locks down the core principles that form the basis of his entire premise. The first of these principles is to not criticise, condemn, or complain.

Think back to the last time you were criticised. You probably felt humiliated, got defensive, felt resentful, or some combination of the three. It’s human nature to instinctively react this way, and by criticising, condemning, or complaining to your debtors about their late payment, you’re going to make them feel the same way. Sure, it’s their job and legal obligation to pay you, but if you approach them with criticism, condemnation or complaint, you are priming them to be against you right at the moment you’re relying on them to do something for you. Got a debtor that’s, let’s say, 14 days overdue on payment? Don’t punch out an email telling them “it’s absolutely unacceptable”, instead try “this is becoming problematic for us, could you please let me know when payment will be made?” Don’t make things any harder for yourself than they need to be, and make sure not to approach your debtors with criticism, condemnation, or complaint.

The second core principle in this section that transitions perfectly into effective credit control technique is give honest and sincere appreciation. This is a logical step forward from the previous principle.

Carnegie posits that people rarely work to their maximum potential under feelings of negativity, and as such offering honest appreciation (not “simple flattery”, as he puts it) is how you achieve the best out of them. We’ve pushed the importance of ‘Thanks for Paying’ emails countless times, and here Carnegie effectively is too. Put aside your ego and when a customer pays you, whether it was on time or not, thank them for it. Showing that appreciation honestly and sincerely will work wonders in getting them to pay on time in future.

Six Ways to Make People Debtors Like You

Carnegie builds off his initial core principles in this section of the book, steering towards the goal of making new friends. When you think of your PITA customers, you might just about boil over at the concept of being friends with them. That’s okay, I’m not asking you to take them to brunch, but your dealings with them can become a whole lot easier if you leverage the principles Carnegie covers in this section.

In this section, Carnegie says:

“You can make more friends in two months by being interested in them, than in two years by making them interested in you."

I propose for our purposes it be rewritten as:

“You can turn more PITA customers into Superstars in two months by being interested in them, than in two years by making them interested in you.”

By this I mean learn about them. Find out what they need to be able to make payment. Find out who exactly you need to speak to settle the invoice in question. Find out when they make their payment runs. By asking questions about how they operate, and figuring out how you can best work with them, you’ll will do much more to get your invoices paid on time than simply expecting them to fit into your business’ cookie cutter approach.

Carnegie goes on to support this with two other principles in this section: be a good listener, encourage others to talk about themselves and talk in terms of the other person's interest. I see all three of these as going hand-in-hand in how you should approach your debtors.

This isn't the end of Carnegie's sage advice and its application to amazing credit control practices. Next week, Part 2 rounds it off. I'll see you all then!

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