Move the fence…. Many of us do not realize we have a “fence” for members. The fence I am talking about is the number of days past due we will allow a member before we make calls or send a personal letter. For many of us the fence may be thirty (30) days or it may be forty-five (45) days past due. We know we get judged on accounts over sixty (60) days, so that is “our fence”. We do not want members to get that far past due for sure.

The phrase “move the fence” means to move the line back a few days. If at 35 days you start looking at accounts, then start looking at 28 days. If you don’t even get serious before an account goes 45 days, the move your line back to 30 days and start working accounts sooner! My goal is to look at every account that is 12 to 15 days past due to spot trouble and get ahead of it. There are many ways to do this and it may take a combination of several of them to accomplish the goal. You may have to reassign duties to other collectors. You may have to work one more night a week or a half day on Saturday. You could start sending the personal collection letters sooner and drop one of the automated notices. You could use automated phone calls through our website – www.auto-dialer-solution.com But, the entire process will be good for you and the Credit Union/Financial institution as a whole. Here is what you can expect as some of the benefits for moving the fence and start working accounts sooner…

• The Speaky Wheel Gets the Grease! It is true! When you squeak earlier and longer you get the member’s attention and their payments.
• You must train your members to pay you sooner. You teach them by your attitude and sense of urgency. When your attitude of what is acceptable changes, then they will know and act accordingly. Remember, people are predictable in groups not as individuals.
• Major Benefit: if you “rehab” a member so they start paying under 15 days past due and something happens to their finances, you have more time to help them than if they were floating at 45-50 days past due. 

The extra effort is always worth it. Avoid the last minute collections on the last day of the month that make the job so much more stressful. Start moving the fence first in your thinking and then in your actions. Make a list of steps to retrain your members to pay on time and start making the changes- today. Get help. Pull others in and help them see how the entire Credit Union will benefit from these steps. We often need to train front line staff to properly convey the importance of paying loans on or before the due date. Do not train your members to relay on the grace period before they pay!

It is important to take these steps now. As volatile as 2008 has been, who really knows what will happen in 2009? Please, don’t ignore this advice and regret it in July or August of 2009…..

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