The credit industry is constantly evolving. With the advent of new technological advances, the abilities of credit professionals are extended. Instead of manually searching for information on businesses, credit managers can focus more on the overall credit process, what is working and what they could be doing to improve it.
Below are a few best practices that most credit professionals should follow.
CENTRALIZE
Your credit team should be fully dedicated to the work in their work in the credit department. Tasks concerning the credit department shouldn’t be placed throughout the business, such as sales representatives being responsible to check the credit on their possible new sales. With all the other jobs a sales person is working on, this creates the possibility that checking credit will be overlooked. Your credit team should be fully responsible for all credit related tasks to ensure you have transparency into all decisions being made.
SPECIALIZATION
Often times the credit department is lumped in with collections, as people refer to it as “credit and collections”. Although credit and collections do go hand in hand, since a customer’s credit worthiness can effect whether you ever collect from them, credit and collections are two wholly different tasks. The responsibilities that come along with the credit department should be focused on separately from your collections activities. Credit activities should not be overlooked and should be specialized in with just as much rigor as collections activities.
FOCUS ON THE CUSTOMER
Ultimately, your customers are the most important part of the credit process. Treating your customers well can determine whether you collect from them in the end. Your credit team should make clear to each customer who their main point of contact. In addition, each industry that your customer is in can make a difference in what type of credit terms are extending. Your credit team should be familiar with each industry and what the best practices are for each.
USE TECHNOLOGY
Credit focused technology allows your team to focus on the most important part of their activities – deciding who should receive credit terms and what they look like. They shouldn’t be bogged down with manual tasks. Credit tools have made this possible by offering credit scoring, giving a full transparent view into the customer’s credit scores and past payment history. In addition, credit document management allows your credit team to attach and save all supporting credit documents to every account.
