Credit Management July and August 2020

OPINION
AUTHOR – Chris Sanders FCICM
business?’ Another good question is ‘How do
I stop the team using excel spreadsheets for
everything?’ This means looking at systems,
automation, and full portfolio assessments, since
all of these things build resilience and future
proof your organisations. You may end up with
fewer team members but if the statistics and the
predictions are to be believed your workload will
only grow in the coming months, so you need to
do more with less.
CUSTOMERS
When looking at the plan include customer
profitability actions, specifically around the
areas of exposure, risk, and reward analysis. As
a credit manager you have data to do this and as
a strategy it is something that you should take to
the business. Conversely for those customers that
are under-utilised, provide analysis to sales that
highlights these customers. We know that trading
out of this crisis will be tough and sales will need
all the help they can get. Low risk customers with
under-utilised credit limits are the low hanging
fruit for fast revenue generation, with the added
We will remain
in the current
‘work from home’
type environment
for a while yet
as we know
organisations
are generally not
rushing to return
to the office.
benefit of demonstrating value to the business.
In short, become a part of the sales strategy!
DEBTS
As you empty the bucket of disputes you don’t
want your poor billing to start to fill it up again.
Using sales and shortening the dispute resolution
sign-off process will help you. Re-balancing your
BDP should be on the agenda now, if this hasn’t
already been done. Start to measure the billing
accuracy for the reasons mentioned above. A
simple invoice vs. credit note measure is the
best and quickest solution; if you measure it
consistently then you will see a trend. Collections
relies on constant contact and intervention. With
finite resources you need to focus on the greatest
benefit. Enlist the help of sales, use league
tables for overdue debt with the sales, branches
or regions. League tables are a great way for
engaging the business in cash collection and
dispute resolution.
KPIS AND MEASUREMENT
Get the business involved in the resolution of
disputes and develop a league table as above
for sales and the business on dispute values and
cash conversion, debt resolution etc. Sales are
competitive and salespeople will NOT like to be
at the bottom of a league table. Slim down the
KPIs you use and add this to your plan and gain
approval from the senior management for the
measures and the new plan.
PROCESS AND SYSTEMS
Decide on five of your most critical processes
and start now to put a plan in place to get them
back on track or change them to meet the new
challenges given that they may be done remotely
in the future. Ensure that whoever is resolving
disputes is joined-up completely with the
responsible collector, so collection can continue
seamlessly when disputes are resolved. Build in
reviews with sales and senior management into
the new processes since this will help rebuild
trust. Speed is of the essence: if your query
or dispute resolution time is slower than your
competitors who do you think will get paid first?
We will remain in the current ‘work from home’
type environment for a while yet as we know
organisations are generally not rushing to return
to the office. This will make the management
of this new phase more challenging. For many
managers this is still new territory. Keeping
the teams engaged will remain difficult – or at
least more complicated – as some will be office
based and some home based, and some will be
returning from Furlough.
For the full COVID-19 Credit Managers
Playbook II and further information about
the CICM Best Practice Network please contact
cicmq@cicm.com.
Chris Sanders FCICM is Head of
Accreditation – CICMQ.
Advancing the credit profession / www.cicm.com / July & August 2020 / PAGE 43