The Importance of Relationships in Credit and Collections

May 9, 2022


24 min
Good relationships in credit and collections make all the difference to a successful strategy. Both internal relationships with sales and management, and external relationships with customers are key to creating an environment of openness, collaboration — and ultimately, receivables success — yet it’s sometimes a delicate balance.
Lisa Rolfe, ARM
Lisa Rolfe, ARM, Credit and Receivable Manager, The Reynolds Company
Royce Grayson Morse
Royce Grayson Morse, Editor, IOFM

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Good relationships in credit and collections make all the difference to a successful strategy. Both internal relationships with sales and management, and external relationships with customers are key to creating an environment of openness, collaboration — and ultimately, receivables success — yet it’s sometimes a delicate balance. Lisa stresses communicating early and often is important to making certain all the stakeholders are aware of a collections situation, to discovering why an invoice hasn’t been paid, and making sure the issues are resolved to ensure accurate and timely payments.

Lisa Rolfe, ARM, Credit and Receivable Manager, The Reynolds Company

Lisa Rolfe, ARM, has 30 years’ experience in the Accounts Receivable and Accounts Payable field, so is familiar with both sides of financial operations. For the last 15 years, she has worked at The Reynolds Company in Greenville, SC, a manufacturer of industrial adhesives, and is currently Credit and Receivable Manager there. She’s passionate about working in collections, and enjoys building relationships with customers and problem-solving, finding resolutions to difficult situations.

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Royce Morse: Welcome to Meet the Experts, an IOFM podcast series designed to introduce you to many of the more than 200 panelists that answer your Ask the Expert questions. Ask the Expert is a popular feature allowing our members to ask fellow A/P and A/R practitioners any work-related questions and get answers back within five business days. I'm Royce Morse, Institute of Finance and Management's managing editor.

Today, we're talking with Lisa Rolfe, ARM, who has 30 years' experience in the accounts receivable and accounts payable field. So, she's familiar with both sides of financial operations. For the last 15 years, Lisa has worked at The Reynolds Company in Greenville, South Carolina, a manufacturer of industrial adhesives, and she's currently credit and receivable manager there. Lisa's passionate about working in collections and enjoys building relationships with customers and problem-solving in order to find resolutions to difficult situations.

Hi, Lisa, and welcome!


Lisa Rolfe: Hi, how are you today?

Royce Morse: I'm good. How are you?

Lisa Rolfe: Good.

Royce Morse: So today, we want to talk about how good relationships can help make your collections efforts more successful. But first, I wanted to start out by asking you about your background in credit and collections. How you ended up there and was it what you were expecting?

Lisa Rolfe: Well, I've been in credit and collections for about 27 years.

Royce Morse: Oh, wow. Okay.

Lisa Rolfe: And it's been interesting. Not what I expected to do, but it's what happened. But I enjoy it because of the people that I meet, conversations that I have, and the relationships that I build.


Royce Morse: Yeah, that's interesting. We'll circle back to that. But as you and I both know, a lot of people aren't comfortable in a credit and collections role. So, I want to know more about the personality traits and stuff that go into a successful C&C individual.

But let's start out with talking about—since we're talking about relationships, let's start with internal relationships. And particularly with credit and collections and sales. A lot of times, I hear that there's an adversarial relationship there. How do you build that good communication and do you have to overcome their impression that your mission is to make their customers' lives difficult?

Lisa Rolfe: I try to let them know that I'm walking on a fine line between meeting what our credit policies are and what our customers' needs are. And that I'm not fighting them.


I'm just trying to do the balancing act and juggling act that it requires. And the more I can communicate with them and the more I keep them involved in their accounts from a credit collections standpoint, the better the relationship is.

Royce Morse: Absolutely. Yeah, I think it's important that they know that you're on their side. It's not you're trying to discourage people from doing business with you; you're just trying to collect the money that they owe the company. Have any good stories about that?

Lisa Rolfe: There's always a good story, you know? I always tease my sales agents, as, "You know, you guys would give away the farm if you were allowed to, just to make that sale and we can't do that. We have to protect our farm." There's a number of stories.


Royce Morse: Yeah, I'm guessing everybody has those stories and trying to help Sales understand that you really are on their side, and that you're not there to make their life difficult. At what point, when you're in the collection role and you're trying to collect from a customer, and you're having a hard time, at what point do you get Sales involved in that process?

Lisa Rolfe: I pull in Sales when my initial communication is unresponded to, whether it be an email, a phone call. And I also notice that the account is doing something out of their normal. Days to pay are slower, again, not communicating with me. Then, I'll pull Sales in and ask them for help. And they also know that if I copy them on an email, that means there's a problem.


I don't specifically ask them for help maybe the first time that I include them, but I want them to be aware. I think if they're armed with information, it lets them know things are going on.

Royce Morse: Yeah, I think that's particularly important because obviously, you want them to be aware, if there's potential friction between the company and the buyer. And you want to make sure that you don't blindside them, right, so that they're aware that their customers may be affected by what's going on in credit and collections.

Lisa Rolfe: Right. And, you know, you don't know the reason why the invoice may not be being paid. There could be a number of reasons and it may require Sales to be involved.


Royce Morse: That's true. There may be some sort of a problem with the order. Sales might know that, you might not, so.

Lisa Rolfe: Correct.

Royce Morse: Yeah, that's a super important communication to have. Okay, let's talk about external relationships now with customers. Let's start by talking about the fact that there are a lot of businesses that are having trouble paying right now, just from the fallout of COVID. Which the pandemic phase is over, according to the news today. But we know a lot of businesses are still being affected by the fallout of COVID. How are you handling that?

Lisa Rolfe: Again, it's communication. I'm not afraid to reach out to my contacts or look at the order that's in our system and see who the purchasing contact is or who the buyer is, and include them on the communication.


Or pick up the phone and make a call person to person so that you can talk to somebody instead of just doing an email and hoping somebody responds.

Royce Morse: Uh-huh. Yeah, I think that personal communication is important. What's your strategy for cultivating good relationships with the customers so that you can help them be able to pay? 'Cause I’m guessing most customers want to be able to pay, so they can continue to buy from you and continue to do business with you. How do you approach that?

Lisa Rolfe: Well, I let them know that I understand they may be having some difficult times and that I'm trying to do my best to get them what they need for their business to continue producing their product.


But they have to help me too. And so, I kind of do it, it's like a win-win for both of us. And the more they help me, the more I can help them, and the more I can go to bat for them. If orders are being held or if something is taking place that is gonna cause red flags.

And it's just understanding where they're coming from and not getting... I can't get defensive or have an attitude with them because they're not paying us. And I keep that in the back of my mind, that everybody has problems and I try to listen to them, and try to find creative solutions that might help them.


Royce Morse: One of the things you talk about is smiling when you make collections calls. How does that work?

Lisa Rolfe: It just changes the tone of your voice. I think people can understand that, when you're talking on the phone to them. I think it makes an easier conversation. It just helps.

Royce Morse: Yeah, I think people can hear that. So, they feel like they're being engaged and not attacked.

Lisa Rolfe: Right. And some of my accounts, we might get on track with how are your kids, or how's the dog, or those little personal things. I try to remember those with my accounts so that when I'm talking to them about needing money and collecting money, I might be able to remember to mention something like that. Their favorite football team.

Royce Morse: Right, just engage with them on a personal level, so they recognize that you know they're human beings.


Lisa Rolfe: Correct.

Royce Morse: I think that's really important is just not to devalue the humanity or the person that you're talking to.

Lisa Rolfe: Right. And also understand that they're doing a job too.

Royce Morse: Absolutely.

Lisa Rolfe: And they may not have the power to decide, I'm gonna pay you today. But I understand that they have a job too.

Royce Morse: Yeah, and I think they're probably – if they have to prioritize who they're gonna pay, you would think that they'd be more inclined to pay the person they have a good relationship with than the person who's taking an adversarial approach to them. I would. If I had limited funds, I would want to pay the person that I got along with rather than the person who was kind of being a jerk to me. So, I get that.

You talk about having a plan before you make a collection call. So, let's do a little role-playing here.  Let's say that I'm new to your department. I'm a collector and you're trying to teach me what to do to prepare to make a collection call. What would you tell me?


Lisa Rolfe: First, make initial contact. Just put a general together, whether it be a general email or a general phone call, out there. And just ask the questions, when can I anticipate payment for that invoice? And see what the response is from that account.

And then, once that account responds, depending on how they respond, then you've got to say okay, what's our next step? If they don't know when they're gonna pay, they're tight on money, they're waiting because some of their people haven't paid them, then that's when we get into maybe being creative and saying well, if you pay me today by credit card, I'll waive the convenience fees. Or if you can pay me half now and half in a week.


Those kind of steps is what I mean when you have a plan in place of what's your best-case scenario and what's the very least thing you'd want to do to get your money.

Royce Morse: Yeah. How much latitude do your collectors have to negotiate with customers?

Lisa Rolfe: Not a whole lot. We have pretty strict credit policies in place and we're expected to adhere to those. So, if we have a feel that one of them is going to give us a hard time, then we'll get together with upper management and say okay, what's our best case? What can we do? How can we make this work? And then, we'll devise a plan and then go back to the customer.

Royce Morse: Yeah, that makes a lot of sense. And it kind of shifts the responsibility from the collector trying to make those higher-level decisions and get some help with that.


I would assume that if you run into problems like that as well with a particular customer that's just not cooperating or is just kind of stonewalling you, that you would talk to your salesperson and say hey, I need some help here.

Lisa Rolfe: Absolutely. I bring in the salesperson, but I also will bring in our sales manager so that he is aware of what's going on. Maybe he can have some input with the salesperson, maybe a joint call to the account or something like that.

Royce Morse: Yeah, that makes a lot of sense. So, there's the internal and the external customer all working together to solve that problem.

Lisa Rolfe: Yes.

Royce Morse: Yeah. Do you have individual plans or individual approaches for specific customers?


Lisa Rolfe: I do, yes. There are certain accounts that I have to—lack of a better word—tiptoe around because they're kind of sensitive, and there's ones that I can be pretty frank with, and all of those in between. Again, it's getting to know your accounts, getting to know the salesperson that services those accounts, and putting the whole picture together.

Royce Morse: Now, I'm assuming that you have a team of collectors that report to you, is that right?

Lisa Rolfe: We do not. I am the collector.

Royce Morse: You're it, huh?

Lisa Rolfe: I am.

Royce Morse: Wow. Okay, do you document your individual approaches with each customer? Do you rely on memory? How do you go about being consistent with how you approach your customers?


Lisa Rolfe: I have notes in our system. When I actually make the call, however I make contact, I note it—who I'm talking to, who I'm emailing, whether or not I'm involving Sales at that time. So, that helps my memory because our memories aren't 100 percent.

Royce Morse: Mine sure isn't!

Lisa Rolfe: No, not at all.

Royce Morse: And the more stuff that you put in your brain, you know, my brain gets full, so. I can relate to that.

Lisa Rolfe: Absolutely.

Royce Morse: Right. So, let me ask you this. How do you approach staying up with best practices and do you benchmark, that sort of thing? How do you formulate your approach? Have you just honed it over the years? Do you look for external information to help you improve it? What's your thinking on that?


Lisa Rolfe: I think it's a combination. It's experience and learning from mistakes that might have been made back in the days. And then also, talking to other people in the collections group or collections field. Using the Internet to search out a company to try to find, is there any negative press on them? Is there some positive press on them? Just whatever tools I have, I'm going to use to make the best decisions and try to approach the situation as best I can.


Royce Morse: Yeah, I think that's very sensible. You have to be super flexible and stay aware of what's going on. Speaking of that, what's your prediction? How do you feel as though collections is evolving now that we're supposedly coming out of the pandemic? Do you feel the winds of change? What's your impression of how the landscape is changing right now?

Lisa Rolfe: I'm not sure that we're out of it yet. I really think there could be some tough times ahead, especially you're hearing about interest rate changes, inflation—

Royce Morse: Inflation, yeah.

Lisa Rolfe: And in our business, the cost of our raw materials to make our product have gone crazy in the past year and a half. And they're still forecasted to continue crazy. So, businesses are gonna be having higher expenses to produce their products. So, in turn, they're gonna be paying higher costs to get the finished good to help make their product. So, I think we've got some tough times coming.


Royce Morse: Yeah. I guess we're not out of it yet. Let me ask you about customers that are having trouble paying, but need your product to continue to operate. What's your strategy there? Do you encourage them to use a card? Do you encourage them to just order smaller quantities? How do you go about dealing with that?

Lisa Rolfe: Well, there's several different things that we do. Some of the accounts, we'll limit the amount that they can order by looking at their history of their order pattern and talking with Sales to find out, what do they really need to do their production in a 30-day period?


Can we reduce it so they get one pallet of product instead of ten at a time? We also, if they have an invoice that's due and they really need product, then we can say well, you can pay us for this past-due invoice on a credit card. Sometimes, we'll waive the fees, if we can get commitment to pay it right then and there.

We have a lot of variables that we can do to try to help the customer and try to work with them. Again, it's on their side also, making a commitment to us that what they say they're going to do, they do. Then, if they break their commitment or their promise, then okay, you didn't follow through, so now we've got to look at something different.


Royce Morse: Uh-huh. Yeah, and all the while, you're trying to maintain a good relationship and keep them as a customer. But you also have to apply some pressure sometimes, I would guess, just to make sure that they're not exceeding their credit limits. Now, do you set the credit limits for the customers? How does that happen?

Lisa Rolfe: Yes. Credit limits are set based on what their anticipated volumes are going to be. So, Sales will provide this is what they're forecasting per month, so let's set a credit limit that's reasonable. We do that. We also look at credit reports, their references, to make sure that they're worthy of that amount of credit.


Then, when an account gets close to their credit limit, I'll send out a message to Sales and say hey, you know what? They're very close. Something's going on. Then, Sales has to, again, stay involved to find out why they're buying more than what was forecast or anticipated. Our credit policy is, we can't ship anything over a credit limit. So, at that point, they would have to pay for the order up front or they would have to pay an open invoice that's due.

Royce Morse: Yeah. So, at that point, everybody has to be in the loop. Again, those relationships really matter at that point because you have to engage Sales, and they have to engage the customer, and you have to be looped into that whole dialogue and understand where that's going in order to do your job.


Lisa Rolfe: Right. I try to put together a picture for them that's easy to understand because I'm sending it to the customer and Sales. So, I'll make like a little spreadsheet that shows their open invoices, their open orders, and what their credit limit is. I try to keep it very simple, very clear so there's not a lot of words to distract them.

Royce Morse: Right. Just get it out there and let them know what's happening.

Lisa Rolfe: Right.

Royce Morse: So, in terms of relationship management with customers and Sales and probably upper management to kind of let everybody know what's going on on your side of the operation, what would one super valuable tip be that you would offer other people in the same situation?


Lisa Rolfe: Make sure you have the support of your upper management with what is decided or what you're planning to do before you implement it.

Royce Morse: Yeah, that's true. 'Cause if it comes down to it, you need them to back you up, right?

Lisa Rolfe: Correct. You can't have upper management telling you one thing, and then going to the Sales team or the customer and saying something different. Because it undermines what you're trying to do.

Royce Morse: Right. I think that really wraps up the importance of the relationships that you have to maintain. It's not a simple matter. It requires constant attention and constant communication to make sure everybody's on the same page and sending the same message, while trying to retain your customers. It's kind of a balancing act, isn't it?


Lisa Rolfe: It is. I always say that I have to walk a fine line every day to keep the customers happy, and keep the sales guys happy, and keep following the credit policies that are in place.

Royce Morse: And keep the wheels turning and sending the shipments, but also getting the payments.

Lisa Rolfe: Absolutely. Yeah.

Royce Morse: Absolutely. Well, I think that's extremely valuable advice and I appreciate your time. Hopefully, we'll have an opportunity to talk again. Thank you so much, Lisa.

Lisa Rolfe: Thank you.

Royce Morse: Thank you for listening to Meet the Experts, an IOFM podcast series. Remember, if you have a question for our guest or any of our experts, be sure to log into

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