5 Tips from Credit Managers

Credit Management Customers

5 Tips from Credit Managers to improve credit management

Whether you’re a seasoned credit professional or just out of finance school, taking advice from industry experts at any juncture is a smart move.

It’s a well-known fact that experts have the power to influence and shape industry best practice. More than ever before we see technology and business entrepreneurs re-imagining their own visions for the future.

The credit management industry is being thrust into the limelight by financial technology, which is having an impact on the credit manager’s job. We understand that colleagues and clients compete for your attention non-stop, so it’s important to continually learn and stay connected with industry trends.

With that in mind, here are 5 tips from credit managers to get you thinking about how you can stay on top of your game:

Tip #1 – Build a relationship between sales and credit teams

Start by building a rapport between sales and credit managers, matching their unique skills together to achieve a shared goal of increasing company profit.

Proactively educating sales teams on the triggers and steps you take when an account falls into arrears and encouraging them to play a positive role early on.  Can help to maintain strong customer relations and ensure any problems in paying are understood and solved before they escalate!

“It’s all about relationship building. The attributes of a salesperson and a credit manager are quite similar. It’s important to build on these skills and have a better understanding of the industry.” Sophie Chatz, Former Credit Manager at Pacific Brands.

Tip #2 – Use data to inform decisions about credit risk

Comprehensive credit history, together with trading data are resources that should be used more frequently by credit managers to enable speedy decision-making and better risk management.

Analysing past ordering and customer payment behaviour can help to both predict and inform the necessary  decisions to alter credit limits (to support greater orders) or to prioritise for closer attention in in debt management activities.

“This ensures transparency and openness within organisations [sic] this is also the key to moving alongside the fast-paced developments of the credit management industry, which has seen the boom of automation and credit management software services in recent years.” David Hunt, Credit Manager at Fuji Film Australia.

Tip #3 – Adopt technology while taking a “customer first” approach

The benefits of a modernised approach to credit management will including challenging of the status quo and to more confidently handle everyday challenges – head-on.

Automation of manual and error prone credit management activities is now common across both accounts payable and accounts receivable.  As your customer’s experience of technology both personally increases, so too does their expectations that suppliers will also provide convenient, efficient and ‘always-on’ services across the whole order-to-cash process!

Automated accounts receivable (A/R) platforms not only automate the calculation and communication of overdue reminders, but also make it easier and more convenient for customers to pay (via multiple electronic payment options) and to notify you when there is a problem with the goods, services or invoice details. 

Encouraging customer’s to communicate ‘issues’ earlier, supports faster awareness and resolution of customer problems and improves the perceptions of their overall experience with your company, as modern and responsive. 

“Engaging with customers will be important as well as building strong relationships internally. Don’t get stuck in a rut, things are changing. Don’t be complacent. Adopt technologies.” David Haysom, Credit Manager at Fuchs.

Tip #4 – Be proactive with risk management

Identifying risks early and minimising them with the best resources ensures that you can adapt to the demands of the credit management industry in a more agile way.

Over time patterns in payments and credit rating changes can be identified across your entire customer base that will help to proactively identify accounts that may be increasing in risk parameters.  e.g. identifying trends across certain industries or business sizes that may be incurring more risk due to changing economic or competitive circumstances. 

“Risk management is a source of intelligence for credit managers. It helps you understand how customers work.” Sue Day, Credit Manger at Manassen Foods.

Tip #5 – Technology will continue to shape credit management, so embrace it!

Technologies like Robotic Process Automation (RPA) & Machine Learning (ML) are a revolutionary and unstoppable advancement in process efficiency and accuracy

With improved accessibility to this technology, forward thinking business are embracing suppliers who can give them this market advantage to stay ahead of the competition

In applying intelligent automation to existing collection workflows and manual processes, valuable credit team members are now freed to proactively manage the credit strategy and actively improve the companies cashflow and hence ability to grow.

“Technology is going to have a big impact on the process of credit management.” Grant Morris, National Credit Manager at Southern Steel Group.

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