Did you know that currently a third of all orders placed are held for various reasons?
Many of these are new Representatives’ orders but…we have a plan to help reduce this number whilst also keeping debt to a minimum.
What do you have to do differently? Nothing – although here you will find a reminder of how you can support credit management.
We are making changes to the system that will reduce the number of held orders referred to Credit Control for LOA 1-6. This will both speed up order processing and improve order management. Each independent Avon Representative will have their own individual order limit based on the credit score calculated on their Representative Agreement (we are working towards supplying you with a guide). Please ensure you check SMA for the order level given to your new Representative and let them know what it is. Orders will still be reviewed to ensure there are none already held in the system, that there are no outstanding balances or unusual behaviour in regards account activity.
If a Representative places an order above their order limit they will be required to pay a deposit or reduce their order. This deposit can be paid using a debit card, which clears the account more quickly.
These changes are effective immediately so Credit Control will now be asking for deposits from the relevant Representatives and any new Representatives deemed a higher debt risk will be asked to pay for their LOA 1 and 2 orders upfront.
This change is stage one of our ongoing project to improve our credit process and reduce debt and we hope you agree that we are taking a step in the right direction.
Whilst testing the new system we saw a reduction of the number of orders being held by one third which is extremely positive. Credit Control will be monitoring the process and welcome your feedback. If you have any questions about this, please contact Credit Control on 0333 234 5555. If you would like to obtain a credit limit please call the Credit scoring line on 0333 234 0222.
Opening Times: Mon – Thurs 8.00am – 4.15pm and Fri 8.00am – 3.15pm
Please find below the answers to some questions that have been raised:
Q. What changes have been made to SMA? Does SMA still just show the first order level limit?
A. There have been no changes made to SMA – the level shown remains at net level, not brochure price level. Therefore if you appoint a Representative who is allocated a £300 order limit on SMA they can place a brochure order of £400. Don’t forget this must include the cost of any brochures, demonstration products and the appointment administration fee.SMA shows just the first order level limit only.
Q. What does ‘higher debt risk’ mean when referring to Representatives?
A. For individuals whose credit score is calculated at less than 75 we carry out a further credit reference check with Experian to determine whether we accept them as an Independent Avon Representative or not. Due to the high propensity of these people to go to debt, we are asking for their LOA1 and 2 orders to be paid upfront.
Q. Why do those with a credit score of less than 75 not get a credit limit?
A. Historically, these individuals have very low retention rates and one in five of these accounts go to debt. We need to protect Avon and therefore we do not want to allow those with adverse credit histories to become Representatives – this part of the process is unchanged. If these people do become Representatives we will not limit their order level as we require them to pay the full amount before the order is processed and delivered. Please note these are very small numbers, in the 4th Quarter 2009 only 100 people fell into this group across the whole of the UK.
Q. How can I determine the LOA 2 – 6 order level limit for my Representatives?
A. At this stage we are unable to give exact figures past LOA1 for your Representatives as each order level is being given on an individual basis. If you require the order level limit for your Representatives from LOA2 onwards you will need to contact Credit Control. Due to the changes we are currently working through we are closely monitoring the process and will be making some changes as necessary. We want to balance the ability of new Representatives to grow their business against the risk that some will build up large balances which are never paid. Once this piece of work is complete the Credit and Collections department will share the figures.
