Dear Crabby,

I’ve been the person in charge of credit at my company (over 200 employees) for the past two years, and I’m the third credit professional in the last eight years to have this position. I found out that the turnover was rather high (they left on their own) after I became employed and it wasn’t long before I realized why.

You see, it appears that upper management views my position as “ancillary” or an “adjunct” to the intense sales driven mission of the company. Although I am constantly cleaning up past due messes and preventing write offs, I’ve actually been told on a couple of occasions that the company would like to automate my position. Talk about making me feel replaceable!

So, here’s my question to you. Like the others before me, do I leave and look for an employer who appreciates the credit function or do I try to prove my worth?

Signed: Low Credit Self Esteem

 

Dear Low,

Oh goodness! You really have quite a difficult situation on many levels, especially in view of their comments directed to you about automating your position.

As there are a lot of things I don’t know about your company and its sales and receivables situation, if you would like to take a stab at informing the powers that be why they need you, let me give you a few quick ideas for your consideration.

1) Results: I would suggest that you send out a monthly report to those involved in supervising or evaluating your position that contains the following details:

  • Number and total amount of past due accounts
  • Number and total amount of past due accounts your department collected in that month
  • Number and total amount of disputed past due accounts that were resolved
  • Number and total amount of accounts placed with third party collection entities
  • Number and total amount of accounts collected by third party collection entities
  • Number and total of accounts you have flagged as not being credit worthy
  • Number and total of flagged accounts that were overridden and sold to
  • Days Sales Outstanding on a monthly and quarterly basis

These figures are probably very easy to put together and if management sees a little bit of progress each month, I believe your efforts will begin to be noticed and appreciated. Conversely, if accounts continue to become past due and uncollectible, it may be due to continuous credit overrides, which is why I’ve included reporting the number of accounts that were flagged as not being credit worthy but were overridden. This is also very important information for your upper management.

2) Department Update: Here’s where you can write a paragraph talking about all the things you are doing to improve your department’s activities. This may include:

  • Credit policy creation and improvement
  • Cross department data and information cooperation (especially how you’re supporting the expansion of sales safely)
  • Compliance improvement
  • Staff training & development
  • Customer relations improvement

Although I’ve just touched on the surface, the list can be quite extensive. However, keeping the report as short and concise as possible will increase the chances it will be read.

3) Identify an ally: I would highly recommend that you cultivate a relationship with someone in the upper management who can appreciate all that you are doing. Hopefully they can continue to guide you on your approach in educating upper management on why your credit risk management and collection skills, and those of your department, are indispensable to the company’s long-term growth and prosperity.

Please let me know how things go.

Crabby

Dear Crabby is a credit and collection advice column by Nancy Seiverd, President, CMI Credit Mediators Inc. Your thoughts (nseiverd@cmiweb.com) on what to advise are most welcome, and with your permission, we’ll reprint your comments in the next issue of our newsletter.

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