Your Credit Manager Needs Your Buy-In

Your credit manager is a regular Johannes factotum although they always remain a master of one, Credit Management.

Outside of senior leadership and Human Resources your Credit Manager is the only employee who regularly interacts with every department in the company. They create reports for senior finance and leadership teams, they interact daily with sales and marketing regarding customer issues, they interact with various members of operations, administrative staff, human resources, treasury, legal and I.T.

A successful Credit Manager can manage all of these relationships to ensure the order to cash process goes off without a hitch by developing trusting relationships within all of these groups and securing buy-in of their peers and senior leadership.

Credit Manager: What good is a sale if you cant get paid?

Sales: Who cares if we get paid if I still get a bonus for the sales revenue?

Do you see the dilemma? This is often the conflict that is encountered and where the importance of buy-in within leadership comes to play. If the CEO or Sales Manager can't support the Credit Manager then the battle has already been lost.

The majority of credit professionals will tell you that the most difficult team to work with is Sales. The Credit department is often referred to as the department of "NO" and it's up to Credit Managers to change this stigma to the department of "How". If the customer isn't credit worthy how can we close the deal with minimal financial risk to the company.

Building confidence with your sales team regarding the Credit Managers ability and desire to help close the deal creates a win win within any firm. It's imperative! A trusting relationship with your Credit Manager allows for transparency and negotiation to make the transaction work. Increase revenue streams with less risk.

In addition to working with Sales, Managing a team of Credit Analyst's and the Account Receivable Department under one umbrella creates a perfect opportunity for process improvements and streamlining the entire AR process. A lower DSO is typically found in companies where this synergy exists.

Credit Managers will often find themselves interacting with Treasury to ensure precise cash application of customer payments, tracking of NSF cheques and account reconciliation.

Working with field staff, dispatch and all customer facing employees allows the Credit Manager to become the face of the business and have a clear understanding of the customers needs and expectations when delivering a correct invoice for payment. The vast majority of aged AR has nothing to do with the credit worthiness of the customer but rather the quality of billing.

Your Credit Manager, when given the reins, should be able to create a cohesive partnership with all stakeholders in order to drive constructive influence in obtaining a common goal. There are no silos here, only a collaborative environment where ideas come to fruition.