How the Credit Profession as a Whole Spends its Time

http://www.credittoday.net

August 1, 2007

Based on over 1,100 responses in Credit Today's 2007-2008 Salary & Job Satisfaction Survey, covering at all levels of the credit profession, the following table details how the credit profession as a whole spends its time:

How the Credit Profession Spends Its Time . . .
Data for the profession as a whole

Activity Percentage
of Time

Collection activities 25%

A/R activities 15

Financial analysis 10

Internal meetings 9

Deductions/claims 7

Computer systems 6

Personnel issues 5

Direct, non-collection contact with customers 4

Credit group meetings 3

Customer visits 3

International credit issues 3

Education/training 3

Bankruptcy/insolvency issues 2

It can be instructive to benchmark both your overall credit department and your own personal time commitments against this profile. Different positions have differing "profiles" of their time, and different companies and industries have different demands that require adjustments.

For example, those at the highest level - with the titles of director of credit or VP of credit - spend more time in meetings (17 percent for VPs of credit, 14 percent for directors), and much less time on collection work (12 percent for VPs and 18 percent for directors, compared to 25 percent overall). Clearly, they're getting the collection work done, but not doing it themselves. Nonetheless, based on the percentages, they're still jumping in to handle collection activities when needed.

VPs of credit also spend more than twice as much time as the profession average on customer visits - 7 percent, compared to an overall average of 3 percent.

Time spent on system activities can be a double-edged sword. As a whole, system issues account for 6 percent of total time spent by the profession. On the one hand, this can be a sign that an investment is being made to push forward with new technology. On the other hand, it can be viewed as unproductive time working to handle a system conversion. Really, both are true. Breakthroughs rarely happen without the upfront pain. Spending the most time on system issues are directors of credit, at 8 percent.

VPs of credit are joined by regional credit managers as the leaders at spending time on education and training-related issues, each investing 5 percent of their time on education or training, compared to an average of 3 percent. We suspect that the time spent by VPs on education is different than that of regional credit managers. VPs likely spend more time coordinating training and education for other staff members, while regional credit managers are probably spending time doing actual training themselves, but we can't prove that with the data.

Investing Time vs. Spending It
One of the keys to increasing productivity in any endeavor is to invest your time on tasks that improve your productivity and increase your capacity to get the job done. Clearly, education is one such item. Others on the above list - "investments," we'll call them, include, but are not limited to:

Financial analysis - Studying to assess risk, which gets ahead of collection problems)
meetings - Many might argue that most meetings are unproductive and a waste of time. This might be true, but the idea is to collaborate, plan and organize for better performance.
Customer visits - Relationship building with key customers is always a good investment.
Direct, non-collection contact with customers
Personnel issues - What's more important than developing and nurturing staff?

In addition, the way one approaches a task can go a long way towards determining whether the time spent is a truly an "investment" or just a "cost." The classic example is that of deductions or claims, which take up fully 7 percent of the profession's work hours. You can spend time just getting the job done, without thought for whether you are solving a root-cause problem (this would represent a cost). Or, you can be spending time on deductions, analyzing the causes of deductions and working to ensure that they will never happen again. Undoubtedly the 7 percent is being "spent" in both ways.

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