As the role of Credit departments is changing and becoming more complex, the roles of credit professionals evolve accordingly. Today, credit professionals should take a more commercial approach to debt collection.
In an ideal world, the credit manager would enable the whole sales process, all the way from prospection to payment.
The Evolution of Credit roles
That makes a different skill set necessary. As CFO Services business manager Michiel De Weerdt says: ‘You need people who are analytical and risk-aware, but who also must be able to deal with people and have a keen sense of commerce.'
Credit managers today don’t have a pure financial profile anymore. It has evolved into a more coordinating role that has a broad, diverse to-do list.
Credit managers of the future will
- act as custodian of O2C processes as these have become dynamic, and monitor the compliance of Sales & Customer Services with these processes
- act as the Sales team’s copilot, focusing on working capital, profitability, and business expansion
- be a liaison officer between customers, Sales, Customer service and Finance
- excel in data management and draw the right conclusions
- have digital capabilities and a digital mindset to implement new technologies and feed the Digital Customer Experience
- be empathic listeners, good communicators, and mediators to pass effective face time with internal and external customers
- be a coach/team player to guide the customer as well as Sales to take financial hurdles in order to establish the best possible sale.
Credit managers of the future will act as custodians of the O2C process and as the Sales team's copilot. They will excel in data management and be empathic listeners.
Benjamin Celis, Credit management project consultant at CFO Services.
Social media savviness
Social media, such as LinkedIn, are a great source of information about companies and their employees. You can identify functions, role structure, and even estimated retention rates. This information can obviously support you when estimating risk or collecting an outstanding receivable. Relevant financial and economic information can be posted online months before it becomes visible in the financial statements.
You might therefore need to integrate social media monitoring into the existing monitoring routine from your financial information provider, not only feeding Sales with reports on payment behavior, but also with financial and business data captured through social media. A simple way to integrate with Sales and Customer service might be to provide the Credit & Collection department access to the CRM system.
The flipside is that, if a credit manager can do this, so can fraudsters. Fraud monitoring and detection, both internally and externally, is, therefore, an area that Credit departments can become more involved in. Credit managers taking this role seriously might eventually play a key role in protecting the company’s assets.
Cultivating the digital spirit
Companies are increasingly using dedicated software on top of their ERP, whether it is for dunning, reporting or any other software. As these different softwares must accurately communicate with each other, setting up and designing the interfaces is of the utmost importance.
A crucial role is reserved for credit managers here, as they must translate company processes & policies into business rules for IT people that are not familiar with credit management (best) practices. Not only should credit managers be able to roll out these new technologies in the Credit department, but they should also systematically foster the digital spirit among all stakeholders. That way, credit managers contribute to the Digital Customer Experience (DCX), whether it is for internal (e.g. fast online credit approvals) or external customers (e.g. customer portals) only increasing their impact on the bottom line.
Having ’digital skills’ and a ‘digital mindset’ will be distinctive characteristics of future credit managers if they want to successfully roll out the digital transformation their department is going through.