How different are you?

Some time ago, I asked three questions of Credit Managers...

This was an effort to determine how CM’s can make themselves indispensible to employers and what gives them a buzz out of turning up each morning?

·         How do you influence the overall gross margin your company achieves?  (and no, I don’t mean by getting paid quickly, ESD, borrowing less or sustaining less bad debt)

·         How can you influence what products your company makes or sells and into which markets?

·         How can you actively increase sales without directly attributing this to increased credit lines?

In almost all cases, the response was common and sadly I have to say, expected. Answers spoke of vetting clients correctly, setting the right lines, dealing with disputes effectively (thereby allowing more orders out of the door), offering discounts and collecting money to terms efficiently, freeing up credit lines. Others spoke to providing funding to accommodate deals or security obtained.

While these answers are correct, they are staple diet functions that do not make you any different to thousands of others.  My questions were deliberately aimed to see how many CM’s were actively engaging in expanded roles and wielding greater influence; in other words what do they currently do or would like to do in order to be viewed a critical member of middle or senior management, one who is the last to be axed or shown the door?

Let me provide a sample of answers I was looking for.

How do you influence the overall gross margin your company achieves?

‘I see variable movements within receivables ledgers, greater emphasis on trade with larger clients (some of who may be of higher risk) and lessening trade with a vast swathe of SME clients where margins are normally much healthier, leading to an overall erosion in gross margin. I see vast unused credit line values and lost business. I provide this type of information within monthly reports to Sales and senior management and force engagement, action and follow-up’.

How can you influence what products your company makes or sells and into which markets?

‘I have at my fingertips data across our supplier and client base that shows who is performing well and who is not and what activity they engage in or are moving to. I see trends in business flow, emerging markets and margin movements that are invaluable to my organisation and I ensure special reports are circulated internally’.

How can you actively increase sales without directly attributing this to increased credit lines?

‘I can see lost business, static or reducing active receivables accounts, diminishing business volumes generally or by account, margin erosion, un-necessary expense and online client enquiries and applications that do not trade. I have average debt values across receivables and easily compute the effect on business volumes by increasing active debtor accounts each month or containing decline. I include such reports with monthly reporting’.

Arguing that many of these functions should be Sales or marketing activities will not wash. Business activities are under intense pressures to perform and more often than not Sales departments are too steeped in working with spreadsheets and ever-increasing targets offering Sales managers little scope for staff management and analysis. Marketing, as an activity invariably bears the brunt of cuts before anyone else and faces enormous challenges in the face of global markets and brand awareness. They could all do with any help they can get.