We’ll admit that a typical credit management job description from the past didn’t make for very exciting reading. Yesterday’s credit manager was heavily focused on mitigating risk by picking through high volumes of company data to decide the creditworthiness or otherwise of customers. The role was laborious and repetitive, otherwise known as boring. Then things started to change.
credit management function had to change. The modern credit manager is a new breed: part salesperson, part statistician, part accountant. This makes the position not only more diverse, but exciting too.
Risk monitoring is still vital to the function, but today’s credit manager also needs to spot opportunities to maximise revenue. They need to think like a salesperson and help the business grow by considering the right sale for each customer, exploiting opportunities without taking an unnecessary risk. This mindset is much more positive than a risk-focused stance that mostly considers the negatives of a customer: cash flow troubles, high debt and a troubled market. It makes for a more involved and enthusiastic credit manager.
The new approach also needs the finance team to work more closely with its peers in sales and marketing so the goals of each are aligned. Information on credit scoring should be fed to the sales team so they can focus their efforts on upselling and cross-selling to the customer profile that offers the most return for their risk. The same data can also be used by the marketing team to help them put the company in the minds of the ideal customer. Working closely with these functions should see their knowledge rub off on the credit manager, broadening their skills while adding variety to the role.
Working in harmony with other departments and spotting and exploiting opportunities means today’s credit manager is proactive rather than reactive. Easy access to tools such as big data, automated actions and analytics models all help them to take a predictive approach. Risks can be identified when there is time to react, and opportunities can be spotted further ahead. There is little sitting back to wait and see, as credit managers have what they need to be dynamic and hands-on.
With a longer list of responsibilities and a greater importance placed on the role, credit managers are a far more valuable asset to a business than they were before. Some depend on them to advise on the stability of suppliers, while others count on their knowledge of customers and the valuable marketing insights this can offer. With business development also among their remit, a credit manager’s actions will be of interest to shareholders too. Greater job satisfaction is the outcome, as those in the role can be sure they are bringing greater value to the business.