Credit & Collections Lessons from 1927

Reading a book from 1927, The Manuals of Business Management, Volume VIII, Credit and Collections, by James H. Picken it was clear how the basics have not changed in nearly one hundred years.

When you look at the skills listed, these are very much what most credit managers say are needed today.  The key in hiring and development is the more rounded the knowledge of the business, the more likely to be successful. 

Credit:

• “Needs to use the opportunity to educate customers into better habits of doing business.”
• “Continual or at least periodic review of customer accounts”
• “Educating salespeople to understand the meaning of credit.”
• “Must possess good judgment, patience, inexhaustible in ideas and plans for managing difficult situations.”
• “Credit should never be refused if by exerting effort it is possible to win an account and to build it into a paying business.”

Collections:

• “Keen sales sense”
• “Must understand the credit policy of the house.”
• “Well organized”
• “Good writing skills”
• “Psychology, ability to understand someone from communication.”
• “Ability to appeal to motives of customer.”
• “Switched on and alert at all times.”
• “Weekly follow-ups with customers”
• “Cooperations with sales house”
• “Persistency is necessary in collections just as in selling.”

Another fun piece of data from 1927 was the reasons for business failure, with 39% being due to incompetence. You have to admire the honesty!

Bradstreet states 39% due to incompetence