Put Credit Management front and center
A sale is only complete when both parties have agreed on the ‘when’, ‘where’, and ‘what’ of payment. Make no mistake; extending the right amount of credit at the right time can seal the deal. And because the extension of credit can make or break the deal, credit management must never fall into the category of an “after thought”.
Every department within a company will benefit from a finely tuned credit management process.
• The sales department can soar when credit decisions can be made quickly, because there’s more opportunity for the up-sell, which translates into more sales.
• The accounting department will operate more efficiently because they spend less time on collections.
• The marketing department will benefit by targeting only prospects that can and will pay. And the over all improved cash flow will benefit the entire company.
This is why company organizational structure becomes important.
Often, companies separate the credit and collections department from the rest of the whole in spite of the benefits that collaborative efforts can bring. Of course, this isn’t true for absolutely every business out there … but it could be a game changer for some.
Consider the importance of understanding the history of a customer relationship. Knowing their history is a good predictor of future business behavior. And gaining insight into customer behavior is found in those real time interactions within every department.
Spotting upward trends or red flags is much easier when there are eyes keeping watch from every angle. The sales team, for example, typically has a finger on the pulse of a client relationship and the customer’s business over all. Because they see the customer often, they can observe how things are going in-house and wave red flags if necessary. There’s not one department within a company that won’t benefit from the knowledge a sales team brings, especially the Credit Department.
If you’ve separated your credit department, sequestering them in a different area of your company, consider the benefits of a more cohesive structure. A well-rounded understanding of your customer can help you make good credit decisions.