Article
Written by Nick Driver
Posted on 21/01/2016

Alter-egos of the modern credit manager

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The changing role of a credit manager continues to shift as the aims of businesses transform. Even for smaller firms, it’s no longer enough to simply be a chaser of late payments. The modern credit manager will need to be able to think like a salesperson, build bridges between departments and make predictions by analysing data. They’ll need to become more insightful, more involved and more valuable to firms as another component to drive revenue – as well as to protect it.

Put simply, future credit managers will need to take on a number of alter-egos:

The coach

Credit managers have valuable insights that other team members can benefit from, including salespeople. The latter can become too focused on turnover when generating new business, and overlook other important factors that need to be considered. With coaching from credit managers, sales associates can better understand what the finance team looks for from customers and prospects, including any warning signs that they may struggle to make payments.

The guru

The future credit manager will need to convince other departments to adopt their way of doing things. For example, they’ll need to persuade sales and marketing that customer scoring is the right way to create an objective decision making process. As the role grows in influence, other teams need to pay attention to what credit managers have to say. Years of analysing customers and the way they think and act gives them a lot of helpful insights. 

The builder of bridges

The new approach to managing credit will see departments collaborate closely together, and it will be up to credit managers to build these important bridges. By opening clear lines of communication between finance and sales, customer credit limits that maximise revenue and minimise risk can be set.

The optimist

Finding the good in bad situations is an important skill for a credit manager, as even bad payers present opportunities. They should think positively and proactively to find new ways to get what is owed. Struggling debtors could be offered a discount in exchange for immediate cash payment. Margins are cut, but any profit is better than a loss.

The analyst

Predictive analytics will become a vital weapon in a credit manager’s armoury to help them spot patterns in customer behaviour and make informed predictions. With an analytical mind, tomorrow’s credit managers will be able to learn from the past and make decisions that set your business up for bigger future gains.  

The statistician

Customer scoring leaves no room for interpretation when it comes to risk and opportunity. By grouping customers into tightly defined sets, finance teams can get the most from them without taking unnecessary risks. The modern credit manager will have an important part to play in the process.

The sales person

The future credit manager’s mind-set will shift towards maximising turnover at every opportunity, and away from the passive and reactive approach that some are guilty of today. Targets and other motivational incentives could become part of the credit manager’s benefits package to encourage this sort of thinking.

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Download the Handbook of the Modern Credit Manager