to the management and sales department of customers who have ceased buying from the house should be made.

With such data placed before the management of a house, it may quickly observe whether or not the credit manager is accepting the maximum amount of business submitted, may determine the amount and percentage of losses from bad debts,

may ascertain the extent and investigate reasons for customer turn-over, may determine the actual cost, in amount, and percentage to sales, of conducting the department. What the results really are, as shown to the management by these reports, is a matter resting with the credit manager, and largely determining his worth.

In any business, large or small, it is necessary at times for

the management to secure comparatively large sums of money to meet some approaching obligation. The wide-awake credit manager can anticipate such needs and be prepared to meet the situation by keeping in touch with his management as to extraordinary requirements, and as to routine needs by watching the accounts payable and the bank balances.

The growing importance of the credit manager's work and the increasing complexity of his problems, demand that his qualifications be such as to enable him to keep in constant touch with the management of the house. This will keep him informed of what is needed by the management and what is expected of him, and consequently permit him to fit his department and activities into the general scheme of things. It will the better qualify him for his relationships with the customer, with other departments of the house, with outside agencies, and with other credit men. It will make him realize that he is an instrument of action, whose purpose is to converge and harmonize his efforts with those of others, so that his organization, his house, may move forward as a unit, justifying its existence as an organization in the eyes of the business world.

REFERENCES

Hallman, J. W. Organizing the Credit Department, Chaps. V, VI. McAdow, Finley H. Mercantile Credits, Chap. IV. New York, Ronald Press Co., 1922.

Walter, Frederick W., Ed., The Retail Charge Account, Chap. XIV.

Part IV.-Completing the Credit Transaction

CHAPTER XIX

COLLECTIONS

Training the Selected Buyer. The credit chain will be kept intact only when it may be assumed that in the majority of cases the buyers who have been selected have paid their bills or are ready to pay them, at the appointed time. The credit transaction will then be completed, and the organization is ready for additional extension of credit to the same or other individuals in the regular run of business. However, there is generally a minority even among the selected buyers whose payments are not as prompt as they should be, and in consequence take the time and attention of the credit man. These cases call for that extra portion of knowledge of human nature and courage which can be used to train those selected buyers who have not quite come up to par, but who, nevertheless, may become profitable customers of the house.

That firm is most fortunate in which the credit manager is able to take these weaker customers and, through a spirit of helpfulness, train them in the way they should go to the mutual satisfaction of all concerned.

The Credit Manager as a Service Salesman. In all his ideals of training and in all his attempts to aid in the distribution of business wisdom, the credit manager must not for a moment forget the principles of business upon which his house is organized. He must always remember that he is a credit man because his house sells goods, rather than that his

house sells goods because he is a credit man. He is there to sell his own house as well as to collect money and every collection must be carried on with the idea in mind that the customer is to complete the transaction with increasing enthusiasm for the firm from which he buys.

With so large a part of the sales in modern business enterprises made on credit, the collection end of the work has become a leading essential in business, and is of no less importance than the work of making the sales. Unfortunately though, many business houses do not seem to realize the importance of good qualities in the collector; they very often look upon a collector, or a collection department, as a necessary expense or evil in business, instead of a vital money-producing factor. This attitude, when it exists in a business organization, will often interfere with the success of collections and collection departments, which will in turn constantly interfere with the selling end of the business. After all, it is largely the attitude of the collector that renders his work effective or ineffective. In other words, the spirit of the collector is of equal importance with the material machinery which he may control in making collections. If the collector's mental attitude is not right, if he lacks inspiration, his work will reflect it and usually show corresponding results.

Much stress is usually laid by sales managers upon inspiring salesmen, but the truth is that the skillful collector requires as much inspiration, as much encouragement and support, and as many good qualities as a good salesman. It may be safe to go a step farther and say that the skillful collector needs even more tact and good judgment than the salesman. The salesman is usually helped by the attractive or useful commodity he shows, or by the demand existing with the prospect, but the collector has no such aids. the salesman deals is in the mental attitude of one who is to receive something in materials or service, but the prospect

The prospect with whom

with whom the collector deals is always in the mental attitude of one who is parting with some of his possessions. There is a vastly great difference between talking a man into receiving something, and talking him into parting with something.

Certain conditions and suggestions will produce certain effects on the mind of any individual and will almost invariably lead to the same results, modified by the restrictions of surrounding circumstances. Therefore, if it is known who a man is, what his circumstances are (what he has), and what kind of merchandise or service was sold to him by the house, the collector should be able to tell to some degree what the mental attitude of that man should be toward his bill. It is the task of the skillful collector to be sufficiently acquainted Iwith the facts in the case to know what the mental attitude of the customer under normal conditions should be, and then know what steps to take which will cause that customer to part with his money, if possible, willingly.

The Planned Appeal.-To deal with a man's mental atti-. tude one must first of all, to use a selling term, get a point of contact. This is needed to secure real attention. Then, if the power of habit is known and how to use that power, or how to appeal to a man's reason, motives, instincts, emotions, pride, sense of honesty, etc., spontaneous, automatic response may usually be secured. Also, the power of suggestion that will set the subject's imagination to work should not be overlooked. And here the indirect or implied action is often more effective than the direct. For instance, a statement that certain actions on the part of the customer will compel the creditor to use other means to collect, will be found to have a far better effect on the customer (and in many cases secure the desired result) than when a direct statement is made that unless he does so and so the creditor will take certain steps. The