Credit & Collection Training

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When it comes to credit and collection training, it's common for departments to provide informal (spend-some-time-with-this-veteran-employee) training and supplement this with some outside training (e.g., conferences, classes, seminars). While these are important elements of credit and collection training, they may not be sufficient. What's lacking? Formal internal training.

"Our credit department has had annual two-day learning seminars for years," says one credit director whose company has asked not to be identified. A few years ago, the department experienced a significant turnover that caused it to rethink its training program. "A lot of divisions were picking up our younger analysts," explains the CD. "They were doing this because these analysts had a better background and training. Since so many new people were coming in, there was a need to get everybody on the same page at the same time."

In past seminars, the department would focus on a lot of information in just two days. It would take a look at bankruptcy law, accounting rule changes, how the accounting rules would affect its financial analysis, and it focused on different techniques.

Since this was so much to absorb in two days, the department took a different approach about three years ago. "Every Monday we had two-hour training sessions," says the CD. "We did this for about 12 weeks. We started with the basics in terms of going over analytical techniques. We expanded on what was happening in the legal and accounting areas, and we continued to focus on financial tools and legal tools to help our overall process."

This went over well, so the department has continued using different training tools and training sessions. The following year it brought in guest speakers from different divisions around the company. This gave the employees an idea about what was happening in those areas and in what direction they were going. "We brought in people from strategic planning departments and our corporate vice president of finance," the CD reports. "We began building on the knowledge of the corporation."

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The department has also maintained this entire program and seminar information on a database so employees can use it for a reference as needed. "If new employees come in, or old employees are switching divisions, they can do their homework by looking at our files," he notes.

"The key to all of this is an atmosphere of sharing," he continues. "You should be able to ask questions of people in other divisions, and take advantage of their knowledge and expertise. This has all been very well received."

Results
"The improvements have been more qualitative than statistical," he admits. However, they have been impressive.

There is a higher level of consistency, a more satisfied workforce, and an improvement in the ability to retain people.
The department has seen an increase in focus, and employees are doing more in-depth analysis on the higher risk customers. There is also a consistency on the less risky customers.
It has allowed them to handle increased workloads as the company continues to buy additional divisions.

"Overall, everybody feels more confident," the CD adds.

Plans for the Future
"We have electronic files for each customer, and we utilize credit scoring as well as financial analysis within each of these folders," he says. "We plan on updating these as much as possible in the future."

The department is also a supporter of the NACM Graduate School of Credit and Finance. It recently has had employees go to that school and come back to teach other employees what they have learned. They hope to see that program take off and will be adding to it in the years to come.

"We also continue to roll out programs that deal with technology," the CD concludes. "We plan on coming up with many different programs in the future."

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.