Developing a target driven credit control team

When thinking of incentive programmes, we automatically think of cash incentives. But reports show that for many staff, financial targets aren’t necessarily what drives them to do a good job. Instead, far more nuanced factors come onto play, such as:

· Effective leadership

· Feeling valued

· Clear instruction/guidance

· Understanding what is expected

· Understanding what “success” looks like.

This is not an exhaustive list!

4 aspects are crucial for an incentive based working environment:

Measures and targets

Decide what aspects of your department can be measured consistently – a good example is DSO. The simpler the measure is, the easier it will be to understand and the less chance of anything going wrong!

Decide upon a target that is achievable. For example, to reduce DSO by x% within y period of time.

Make sure you are consistent and accurate, since targets and incentives will inevitably be scrutinised closely by staff.

Have individual and departmental targets. Make sure these form a key part of annual appraisals.

Be flexible and listen

It is in nobody’s interest to keep carrying on when things aren’t working. Keep track of the current position vs target and seek regular, honest feedback as you go along. This allows support to be given to staff where needed, as well as quickly getting on top of problems that are affecting the ability to achieve target.

Be honest with yourself when things aren’t working, explain to others why and seek consensus on what changes need to be made. Acting early on will provide the best chance of success and gives those involved the confidence that management is adaptable and listening to their needs.

Rewards

Going back to the initial point, rewards don’t necessarily have to be cash based. In fact, it is sometimes preferable for them not to be cash at all – they are normally included in the pay-packet and so subject to the usual tax deductions. The size of the bonus can also be emotive – a generous bonus for one can be pocket change to someone else.

Think a bit laterally - staff tend to relate better to something that feels more “personal”. Perhaps a bottle of wine for the “credit controller of the month”? Encourage the rest of the team to put forward a staff member for a particularly outstanding achievement. Targets hit by the team could result in them being taken out for lunch. A box of chocs just to say “thank you” for the hard work is always well received!

Systems

It’s crucial to have the systems in place that can track and measure progress consistently, easily and transparently. If staff cannot see their progress against target then, by definition, there is no incentive at all; if management are having to pull complicated information together from scratch, then they’ll be doing little else.

This goes hand in hand with deciding upon what measures you will use for targets. The simpler they are, the easier they will be to understand and the more straightforward it will be to build them into your systems.

Give plenty of thought to all these factors beforehand. Discuss your ideas with others. Test what the measures will be, how they will be tracked and what the achievable targets will be. Crucially, avoid “springing” these changes onto staff out of nowhere – discuss with them the rationale, background and expected benefits in advance.

Need help with incentivising your getting your credit control function? Then get in touch!