In collections the main thing is to get the money when due. This is more than it seems on the face of the statement. The ideal condition will never be reached when each customer pays his account when due, asking and expecting no favors.
Customers can be educated to the fact that payments are to be met unconditionally at maturity of account. Prompt payment of bills is no more to ask of a customer than is the prompt delivery of goods ordered by him. The country trade often takes this stand: "We buy of your house. They should consider it a favor to get our trade. Hence, if we desire to wait a few days in the payment of a certain bill, the house should not hurry us, as one overdue account cannot make any difference to them." This stand would be comparatively reasonable if the credit man could know, first, the exact condition of the business affairs of the debtor; second, that he desired a reasonable extension, and was not simply ignoring communications with a view of not giving them a square deal. As collections are made, this tendency must be combated and overcome, and those customers habitually making such an excuse must be educated otherwise.
Statements should be rendered at the time the account matures, not the first and the fifteen of each month. Then the statement as sent means something decisive- "remittance expected."
The efficacy of a sight draft as a means of collection except in small towns or country neighborhoods where a bank holds up merchants close to the credit line, is fast growing less. There was a time when the return of a draft meant impairment of credit for the debtor, but that does not now always hold, particularly when the draft is drawn through a bank other than the one at which the drawee does business. It aids to no small degree to send drafts through the bank at which the debtor has his deposit. If he has not the money to take up the draft he cannot give an evasive request for return, the notification is much more liable to be, "Wants extension,-will write." Some houses have a rule to draw through the First National Bank, if there be one. This is not to be recommended, as both the bank and the customer will be better pleased and result be much more satisfactory if the bank at which the customer is a depositor is used.
When a draft has been refused payment, if the customer does not write immediately, a tactful letter from the house should go forth. This should not be a collection letter demanding immediate payment, or worst of all, a form letter, but a heart to heart letter, asking why payment has been delayed.