Increase your Value

 

I admit I was fortunate in my working life. I worked for businesses that recognised the real value add of Credit and where any emphasis were needed to achieve this, I made sure the case was fully known and understood. I also found myself working with superb responsive and resourceful people.

For anyone engaged in Credit Management, recognition, reward and progression remains the ultimate goal, or it should be. This is not however achieved through delivery of expectation alone; it requires intelligent and valuable contributions beyond simple order to cash and bad debt thresholds. If one simply delivers to expectation month in month out, the measure of this delivery diminishes and your value in turn to the Company remains constant and in the eyes of senior management, it becomes dull. 

Working correctly internally and externally should not be confined solely to delivering on expectation but must deliver to all those participants an additional element of value add that helps them achieve more too.

Whether you have full control of terms agreed and credit risk or not, once you have achieved optimised collection and bad debt levels (which cannot be improved) there is a need to deliver beyond this to increase your own value to a business. I’ve known far too many really good Credit people despatched to redundancy pathways or sudden lay-off because they have simply delivered to expectation.

Adding value can be so easy.

Databases and ERP platforms used to deliver on expectation carry with them enormous amounts of information that is on the whole vastly underused and standard recognised Credit Management reporting is often not modified or interrogated consistently enough. Get into the habit of doing this to ensure your reports retain interest.

Many Corporate structures still work with independent divisional silos; Sales, Marketing, Product Management, Warehousing, Transportation, HR and Finance. Each work with tools at their disposal but do not overlay or determine if any of the information at their disposal can be of use to others.

I once recall providing a Sales Manager with a detailed report of information on clients his team sold to and those they did not. It included swings in gross margin generation, Bad debt record, dispute values, unused credit and delivery cost recovery. It even included an aged debtor report on his team’s accounts. His answer was ‘I don’t have time as I’m too busy filling in spreadsheets on sales targets’. Mercifully, not all Sales Managers were like this. Many welcomed this help in identifying issues and problems as well as the opportunities to sell more and better.

A simple routine like a monthly schedule of aged debt with credit lines can be substantially enhanced through addition of just a handful of additional elements, for example cumulative sales, year to date sales, credit terms, gross margin achieved. It can increase enhancement still further through segmentation and interrogation, by sales group or salesman, debt banding, product group, credit line and many others. It is this type of interrogation that so often highlights issues and opportunities that are so often missed through standard delivery.

The opportunity of adding value to Credit Management become limitless once you remove the straight-jacket of ‘conformity’ and it’s this that will lead to recognition and real value. If the opportunity is not there, then fight; argue its case and value in presenting real time information and statistics.

Credit Management works with everyone both internally and externally in delivering what is expected in order to cash and debt management. I consider it criminal if it does not work with those same areas in delivering tangible measurable value add beyond this.

I said I was fortunate, and I was but it did not come naturally. I made sure I gave more than was expected and pushed the boundaries of credit when there was yield and benefit to do so.

I recall a case in which a massive phased order was due to arrive from a client in one of our European businesses and which necessitated a potential short term exposure of up to 5m on the buyer.  Our Corporate EMEA risk authorisations required approval at this level from our Group CEO based in the USA and rushed emails were flying to and fro in an effort to obtain approval. The Group CEO response is one I treasured for some time. It was just one line in an email that said ‘What’s Eddie’s opinion of the deal and risk, I’ll go along with whatever he advises’.

When you’re never over-ridden on credit or term decisions, your foundation in building value add is secure; it’s a wonderful secure platform to stand on.