Offering training to your clients: why lenders do it

Under notification factoring, the factor’s own team collects the receivables. Under a non-notification arrangement, the client does. That means the person following up with customers, depositing payments and preparing the monthly reporting package your facility depends on works for your client, not for you.

Often that person has never been told how the facility works. They were hired to run collections for a business, and the facility arrived later as something the CFO arranged. They may not know why customer payments must go to the blocked account, why credit memos need to be reported, or why a field examiner wants to see proof of delivery.

Training them is one of the simplest things a lender can do to protect its lending.

The problems training prevents

Many of the issues that show up in a field exam are not fraud. They are a collector doing what seemed sensible, without knowing the rules:

• Payments deposited in the wrong account. A customer pays the client’s old operating account and the payment is simply applied in the A/R. The financed invoice is cleared, but the cash never reaches the lender.
• Credit memos issued late, or not reported. Receivables stay higher than they should be, and dilution is understated until the next field exam finds it.
• Disputes that nobody mentions. A customer is withholding payment over a quality issue, but the funder only finds out when the invoice ages past the eligibility cut-off.
• Monthly reporting that doesn’t reconcile. The A/R aging, the bank and the funder’s records disagree, and every month starts with a reconciliation exercise.
• Field exams that take longer than they need to. The collector doesn’t know what evidence the examiner needs, so documents arrive late or incomplete.

Each of these costs the lender time, and some of them cost money. Most can be avoided if the person running the receivables understands why the rules exist.

What client training covers

Our Credit and Collections for Clients library is written for exactly this person. Its seven courses cover:

• How Your Funding Works and Why Collections Matter
• Your Facility’s Rules for Collections
• Depositing and Applying Customer Payments
• Reporting to Your Funder
• Disputes and Credit Memos: Telling Your Funder
• Working with Your Funder’s Verifications and Field Exams
• When a Customer Can’t Pay

It also shares four collection courses with Effective Credit and Collections, and two case scenarios from the client’s side of the facility: Month-End Pressure, where payroll is due and the CFO wants the A/R to look better than it is, and The Customer in Trouble, where the biggest customer is ordering more and paying less.

What the collector gets from it

Training is not only for the lender’s benefit. A collector who understands the facility can explain to their own CFO why a payment must go to the blocked account, why a credit memo can’t wait until next month, or why the field examiner needs the proof of delivery. They spend less time on questions from the funder and less time reconciling figures at month end. And they learn collection skills, through the shared courses on calls, excuses, promises and written follow-up, that make their main job easier.

Why lenders offer it

It reduces risk on facilities you already have. Cleaner receivables, prompt reporting and fewer misdirected deposits make every facility easier to manage and every field exam simpler.

It improves the relationship. Clients see training as a benefit, not a requirement. A lender that helps a client’s team do its job well is a lender the client wants to stay with.

It sets expectations early. Training a new client’s collections staff during onboarding means the facility starts as it should continue, rather than being corrected after the first field exam.

It’s delivered in your name. The library can carry your logo, colors and fonts, so your clients see training from their funder, not from a third party.

Making it work

A few practical points help:

1. Offer it at onboarding. The best time to train a client’s collections staff is in the first month of a new facility.
2. Offer it again when people change. A new collector at an existing client needs the same grounding. Your account executives usually hear about staff changes first.
3. Follow up after field exams. If a field exam finds misdirected deposits or late credit memos, pointing the client to the relevant course is more useful than a list of findings alone.
4. Track completion. Knowing which clients’ teams have completed the training tells your account executives where to focus.

Why it’s worth doing

Training your clients doesn’t replace field exams, verifications or good collections on your own side. But it addresses a root cause of many field exam findings: a person doing an important job without being told how it works.