FOUNDER PERSPECTIVE · CONSOLIDATED
When a Collection Problem Is Really a Sales Problem
Read the flagship perspective →Some overdue receivables are created before Finance ever sees the invoice. The source can be a promise made during the sale, an unclear scope, a price or scheme disagreement, incomplete onboarding, a delivery exception or credit granted without an adequate payment path. In those cases, increasing collection pressure treats the symptom rather than the cause.
Trace the receivable back to the commercial promise
When a customer refuses or delays payment, ask what they believe was agreed. Was the price final? Were deductions anticipated? Was a service level, installation, commissioning, return right or rebate promised? Was the correct legal entity contracted? The answer often sits in sales correspondence, proposals and order documents rather than in the ageing report.
Bad handoffs become finance problems
A sale can be valid yet poorly handed over. If billing requirements, customer portals, tax details, PO conditions, acceptance steps or contact ownership are not captured at onboarding, Finance may discover the gap only when payment fails. The fix belongs in the order-to-cash design, not only in collections.
Credit decisions are commercial decisions
Sales targets can encourage credit expansion to customers whose payment capacity or behaviour is deteriorating. This does not make Sales “responsible for collections”; it means credit terms, exposure and growth should be discussed together. Revenue quality matters alongside revenue quantity.
A simple diagnostic
Take the ten largest overdue items and classify the primary cause. If several trace back to pricing promises, acceptance conditions, incomplete documentation, incorrect customer setup or exceptions approved to close the sale, the collection problem is partly a sales-process problem. The remedy should address the repeated origin.
Create a closed learning loop
Resolved receivables should feed back into customer onboarding, quotation templates, approval matrices, credit policy and sales training. Otherwise the same commercial exception is sold again and Finance repeatedly absorbs the downstream cost.
Keep accountability balanced
Not every delay is caused internally, and it is unhelpful to turn receivables into a blame exercise. The useful question is whether the organisation created or failed to control a condition that made payment less likely or less predictable.
What this means for management
The strongest collection process cannot permanently compensate for weak commercial design. When the root cause sits in the sale, the durable improvement is to change how the next sale is structured and handed over.
- Require a cause and next event for every material exception.
- Use evidence to decide the escalation route rather than defaulting to more follow-up.
- Feed recurring causes back into credit, sales, operations and billing controls.
Related GGA resources
Continue with the relevant operating material in Revenue Assurance, Revenue Realization, the Knowledge Centre and GGA Research. Company-specific legal, regulatory, insurance or recovery decisions require current evidence and, where appropriate, specialist advice.
- Revenue Assurance - prevent avoidable delay before due date.
- Revenue Realization - manage overdue and exception receivables.
- Knowledge Centre - practical operating guidance.
- Research - evidence and methodology.