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Our Subscribers Say...
I think Credit Today is fantastic. You cover many practical topics in the credit field that I use regularly. Just one recent example—a conversation on the ListServ about preferential payments—gave me tips that I used in an actual case. The specific information I picked up from this one discussion saved me $10,000, enough to cover my membership for many years!
- Steve Savino
Manager of Credit & Collections, ASSA Abloy Americas Division, New Haven, CT
Credit Today's Resource Directory and their online e-mail forum (ListServ) provide information on almost any credit-related topic you can think of. It is a great way to exchange information with other credit professionals. As the saying goes, "You don't know what you don't know."
- Scott Goen,
Credit Manager, Big Lots Stores, Inc., Wholesale Division
"We've recently started using the ListServ tool within Credit Today. This is phenomenal and powerful forum for gaining immediate feedback, ideas, and suggestions, relative to any credit topic under the sun, all in a real-time e-mail format."
-Javier Vela, Senior Credit Manager, Global Credit Services, JDA Software Group Inc.
"Being a part of the Credit Today online community is like having the expertise of hundreds of credit managers at your fingertips. These credit execs are willing to help you solve topical business issues as they arise. In the current environment of ever increasing competing priorities which reduce our opportunities to meet peers out of the office face-to-face, this is the most valuable tool you can have on your desktop! It's important that we have a mechanism to reach out to our counterparts quickly to exchange knowledge as well as to stay on top of industry trends."
- Victoria Artis, Director of Customer Financial Services, Pfizer, Inc.
"Over the last 10 years I've seen Credit Today evolve from a monthly credit publication into a quality source of information and guidance for the B2B credit community. The website, with its user friendly form downloads, will take you from examples of new account credit applications to bankruptcy forms and everything in between.
The Credit Today ListServ has become the pre-imminent online forum, providing an opportunity for discussion and comments (and occasional humor) from an impressive list of credit professionals."
David Dungan, Director of Credit
Justin Brands, Inc. (A Berkshire Hathaway company)
Fort Worth, Texas
"There are numerous credit periodicals available to the credit professional today. How good is Credit Today? Is it relevant? I always have to read it late, or online because my credit analysts want to read it the minute it comes in. When my staff wants to read a publication before I have a chance to read it then something is working in that publication. We have cancelled our other subscriptions. When you have the best you do not need the rest."
Ron Woods
Corporate Credit Manager-World Wide
Thales Navigation, Inc.
"The newsletter, coupled with the website and the ListServ, are to us, more valuable than any other credit publication, bar none. I try to use at least one article out of each newsletter for departmental training/discussion sessions."
D. Mark Constantine
Corporate Credit Mgr
Fulton Paper Company
"I love Credit Today and read every issue cover to cover. For me, the greatest perk of a subscription is ListServ. I believe Credit Today's ListServ members may be the most knowledgeable Credit brain trust in existence today. I have saved and categorized hundreds of contributions on a wide variety of topics which I refer to often. It's an easy and cost effective way to network and learn."
Doug M. Thomas
Kimberly-Clark Customer Financial Services |
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Companies - and Credit Departments - Need Specialists
Cross train your people to get them familiar with what others do and to prepare them to help out in an emergency. But don't look for them to routinely handle each other's jobs, counsels this credit management veteran. Training for and encouraging specialization makes credit departments stronger. Troy Anglin, credit manager of Radiator Specialty Company (Charlotte, N.C.) and a 29-year veteran of the profession, has something to say about combining Credit, Customer Service, and other related functions into a "super" customer support department. Separate, Distinct, and Important Roles
"Order entry, credit, collection, and customer support each have a separate, distinct, and important role to play in a company," he says. I think the idea of combining those roles is laughable. Companies need specialists. For example, not everyone has the patience to work in Customer Support dealing with unhappy or irate customers all day. Not everyone has the skills and the self-confidence to call delinquent customers and demand payment. Not everyone has the education and experience to evaluate credit risk and make tough credit decisions on marginal accounts, and not everyone has the typing speed and the attention to detail necessary to work in Order Entry.
"Employees should be allowed to specialize. Cross training for the purpose of understanding how two departments (such as Order Entry and Credit) interact is healthy. However, cross training to make everyone an expert in everything is unworkable. In my opinion, one of two things will happen with this team approach:
- People will specialize even when they are told not to do so, or
- Because everyone is made into a generalist, no one has the specialized skills and knowledge to handle unusual problems when they occur."
Anglin sees the goal of one-stop shopping for complaining or inquiring customers as misguided. Better, he says, that Credit and all other functions should concentrate on eliminating the causes of these conplaints and questions.
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For his part, Anglin spends about four hours in a typical workday evaluating orders pending. "I don't spend enough time on collections," he complains, "because I waste far too much time resolving deductions and disputes."
He insists that a dispute or deduction that results in a credit being issued is a problem that should never have happened. "It means that someone in our organization made a mistake or violated a company policy," he says. "Many customers are looking for excuses to delay payment. When creditors make pricing mistakes or other billing or shipping errors, they're giving the customer the excuse they need to withhold payment.
"Credit managers owe it to themselves, to their customers, and to their employers to track and document the number of errors being made, the types of errors being made and if possible the cost to the company of these errors."
Dollar Limits?
What about establishing a dollar limit below which deductions can be written off without investigation? Isn't that a feasibility of reducing the time spent on this problem?
Anglin agrees that it is. "We've established a dollar limit below which deductions are written off to sales returns and allowances," he says. "Although I wouldn't care to reveal the specific dollar amount in case my customers happen to read this interview. We arrived at the figure by looking at the costs associated with processing small-dollar deductions. I was able to sell the idea of writing off small disputes and deductions to senior management by pointing out that chasing small dollars is like drilling in a dry well. It's hard work, and the costs never justify the benefits."
Operating in a highly competitive industry, the Radiator Specialty credit department needs to be flexible. "Often, I have to make less than ideal credit decisions in order to "meet the market," he says, "but I have to walk a fine line between releasing whatever I can and releasing orders regardless of the credit risk. Even in a highly competitive environment, the credit department needs to maintain its independence when it comes to the ship or hold decision-making process.
And how can you best measure credit department performance in a situation in which you are releasing orders under less than ideal conditions? "If accounts receivable portfolio carries too many high-risk accounts then bad debt write off and delinquencies are going to rise to an intolerable level," he replies. "Therefore, probably the best way to measure performance is to measure the quality of the receivables by: (1) tracking serious delinquencies such as balances more than 60 days past due, and (2) tracking bad debt writeoffs.
Editor's Note: The above article originally appeared in the Credit & Collection Manager's Letter, a newsletter purchased by Credit Today in 2006. This article originally appeared prior to 2000.
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Outlook 2012
This month's survey explores...
- What the top problems are facing credit execs currently, and
- What the top improvement initiatives are.
Click here to participate!
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February 2012
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