case, there is a time saving opportunity. There are many numbers of order to cash activities that are repeated on a daily basis. The point is that instead of reacting to the trigger for these activities, Artificial Intelligence- AI tools can be implemented to do the work for you, saving you time to address more important issues. Keeping in mind that credit and collections are critically important functions for any company that extends credit. As such, it should be executed with a well-defined, formal process, adequately resourced and monitored. Moreover, collection automation can help tremendously in both effectiveness and efficiency
Besides automation, it is worthwhile for credit managers to take the time to understand and consider digital transformation. Many credit managers work in companies with little credit, collection, dispute management, or cash administration automation. Fully implemented digital transformation will impact all aspects of the company ' s cash conversion cycle. Digital transformation is likely to require fundamental cultural changes in how the company ' s order-tocash processes operate.
Credit department should be alive to the fact that it operates in the company space in cooperation with other departments. The aim therefore should be to develop a productive relationship with sales. It is assumed that credit and the sales teams work together well in many companies. Unfortunately, this may not always be the case. It may be that neither credit nor sales fully understand the objectives and priorities of each other. This results in misunderstandings, or even a contentious relationship. The credit manager can take action to reduce these sorts of misunderstandings as there is no reason that credit and sales cannot work collaboratively as one team with the same overall objectives. Overall, credit managers who understand the sales process make more informed decisions that support both the sales team’ s targets and company’ s revenue goals.
The important piece in the jigsaw may be that it is time to revisit and update the credit policy as most companies are likely to have documented credit policies with related procedures. It is also possible that they have been sitting dormant for some time and are seldom reviewed. The credit manager may have inherited the policy when he / she began managing the credit department, assuming it is up to date, and that the staff have been well-trained in its details. In fact, this may not be the case. The staff may be performing their daily tasks with a vague knowledge of details in the policy. It may be time for you to review and tighten your credit approval standards, dust off the credit policy, and determine where critical updates are needed.
It is time to be proactive in the credit department policies, strategies and overall management of activities whether a credit team is composed of one or twenty, this is a good time to assess department activities. Are limited resources being prioritized on the right things? The credit manager should take lessons and make the needed adjustments.
Sometimes it is worth for the credit manager to step back and reassess how he / she approaches managing the credit team. Overarching principles that guide successful companies, are also relevant to this role. A proactive manager may look at the examples above and come up with additional ways to adapt these principles which may help foster company and team environment. All said and done the advantage of being pro-active is that it allows one to engage in higher value endeavors. It is my hope that this is what you implemented in 2024 else it should be your organisation’ s priority in the coming year 2025.
Wasilwa Miriongi is a Certified Credit Professional currently working as the Managing Director, Del Creder Credit Management Limited. You can engage him on this or related matters via email at: WMiriongi @ gmail. com.
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