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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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Establishing Credit Department Authority Over Terms
During a recent three-month period, our company's Days Sales Outstanding increased by eleven days. The controller called me for an explanation for the almost 20% increase. I spent about one hour gathering information and found that most of it was directly attributable to our sales department. Specifically, our sales manager is allowed to approve extended dating to customers "to meet competition", which is exactly what he had done.
I met with the controller and explained what I had found. She commented that I could have refused to release the orders, and I pointed out that the risk associated with the customers who were offered extended dating was negligible based on their size and creditworthiness. The controller asked rhetorically what she was supposed to tell the bank about the increase in DSO.
I've thought a lot about this situation, and I've come up with the following general observations.
- In order for a credit professional to meet his or her manager's expectations, those expectations must be clearly defined and understood.
- If credit professionals want to avoid problems like this involving their subordinates, then they must take the time necessary to communicate their expectations to their subordinates.
- If the credit department is going to be held accountable for changes in Days Sales Outstanding, then the department must be given the authority and the autonomy to refuse to release orders to creditworthy accounts requiring extended dating.
Credit Management Portal
Unparalleled resources to help you with all aspects of the credit function: partnering with sales, reducing DSO, efficient ways to manage A/R, credit reporting resources, how today's credit leaders are solving problems, best practices in all phases of the quote to cash process...
Check out Credit Today's
Credit Management Portal
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- Even with this authority, DSO is still going to be influenced by factors beyond the control of the credit manager. Those factors include:
- Increases or decreases in sales volume caused by seasonality or other factors.
- Timing of sales within a specific month.
- Timing of any month-end cash cut off.
Credit managers are often placed squarely between a rock and a hard place.
Clearly, the credit manager always has the ability to hold orders.
Unfortunately, they are often just as likely to be criticized for holding an order as they are for releasing an order.
I've never been a big fan of DSO as a measurement of credit department's performance, but I recognize the controller's and the bank's interest and legitimate concerns about such a steep increase in DSO. Unfortunately, since I was not made aware of the controller's expectations with respect to managing DSO, I was unable to provide her or the company with the level of service they expected.
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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