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Top tips for credit managers to maximise returns

In 19 hundred and “cough-cough-cough” I did my law degree and one of the very first principles I learnt was that to be a lawyer, no matter what type of law you did, you had to be able to apply the law to the facts.

“Cough-cough-cough” years on and as you develop your skills you begin to understand that without doubt the most important element of any legal case is the way in which we actually establish the facts. If you don’t have command of the facts then you really don’t have control of your case. This article sets out how to take command and will provide practical help for credit managers. 

The key thing about practising the law in my opinion is that it is about finding the pressure points within a case and applying them effectively but to do this you have to have confidence in the facts you are asserting. Indeed, lately, I had to smile when I came across Justice Munby’s Judgment in the case of C v C (Privilege) [2006] EWHC 336 (Fam),
[2008] 1 FLR 115 where he amusingly said of the Claimants: “I am sorry, that is the world of Humpty Dumpty…It is for plaintiffs to establish their case, or at least to put forward a prima facie case. We do not work on a system by and large where the plaintiff simply asserts and says, ‘well, unless and until the defendant produces evidence to disprove our bald assertion, our bald assertion holds the field’.”

Character building stuff for the lawyers on the receiving end but it did make me smile because it makes the point I have been making for years, which is unless you are prepared to exert the necessary effort to assert the facts of a case rather than merely state those facts (with no evidence in support) then don’t bother. You run the risk of wasting your precious time and money! So the big question is how do Credit Managers make sure that their Humpty Dumptys don’t fall off their walls? Below is a short list of starting points I hope you find helpful.

Firstly, the good news is that technology is now here to help. Use case management and archiving systems which drive the user, ensuring a consistent approach is adopted. Set up systems which let the machines do the work for you.

Secondly, you need to take this article and show it to your Board so they understand the importance of investing in those systems that help you when things have gone wrong. Get the decision makers engaged in the process of change and make it a team effort.

Thirdly, think of a system for each customer you give credit to and apply a process right across the board so you can be confident that the same thing happenstime and time again. This is particularly important when executing your contracts

Fourthly, think like a lawyer. Think about how things fail sometimes and work backwards understanding what you need in place if you need to take legal action and eradicate those problems. For example, if a contract is executed then of course it should be scanned in and saved electronically in a designated folder and all originals should be housed in one place. However, much more than that, you need to get the salesperson to perhaps do something like complete an attendance note confirming precisely what was said and what happened at the time when the customer put pen to paper. If it is too much effort to get them to write a long account each time then at least have a checklist in place so you can starve off any potential problems. For example, if all terms were accepted and the salesperson involved could see that they were actually read by the customer then make a note of this. If a term was flagged, discussed and then accepted make a note of this. Then, if the point is raised later down the line you have a contemporaneous note you can refer to in evidence to establish your facts.

If nothing else it will help to jog memories if something does go wrong and will put you at an advantage in front of the Judge. If you do all of that then when it comes to asking your lawyer the only question whichever counts; “Do you think we’ll win?” you won’t get quite as wishy-washy answer that often results in you losing faith in the system. Instead, you’ll present your evidence to them and be told that your chances are good because there is clear evidence in support.

So start today by putting processes in place which will make your supporting evidence of the facts clear and infallible. If you do this then expensive, contentious litigation which erodes your overall recovery rates could quickly become a thing of the past.

For more information about DWF Debt Recovery visit www.dwf.law/recover »

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

James Perry

Director Technical - Co-Manager of the Recoveries Team

I am a Director Technical at DWF and Co-Manager of the Recoveries Team.