Extra Credit

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The nature of credit and collections requires credit managers to always keep an eye out for risk on the horizon, whether it’s concern towards a customer’s persistent cash flow issues or a weariness towards extending credit in a country with growing political instability. 

Why it matters: During periods of economic uncertainty, customers may begin acting erratically, paying late or asking for extended terms. Recognizing economic trouble is one thing, but addressing the onslaught of delayed payments and requests for new terms that comes with it is a larger task.

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Sales and credit are two sides of the same coin, both aiming to grow the business, but from different perspectives. While sales focuses on closing deals, the credit team works to manage risk, ensuring customers are financially reliable and contract terms are sound. These different priorities can often lead to tension.  

When the sales team understands the “why” behind the fundamentals of credit, they can structure deals that not only close faster but also protect the company’s cash flow. 

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When a salesperson is pushing for a credit manager to finish their credit investigation and determine a credit line so they can close the sale, it is important that credit managers find a balance between speed and risk. Organizing the workflow within the credit department to accommodate these requests can help ease stress and take some pressure of credit managers. 

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🕵️‍♀️ Scene 1: The Case File

Did you hear that? A company’s accounts receivable (AR) suddenly spiked. Collections slowed, and cash reserves dropped. The Chief Financial Officer (CFO) smells trouble. Soon after, you’re brought in to investigate the scene of the crime. You’re left wondering...was it overdue invoices? Was it an ineffective collection? Are they just difficult or unresponsive customers? Of all the mysteries credit professionals encounter, nothing compares to the mystery of disappearing cash flow. 

Credit managers act as a company’s true financial detectives, solving the mysteries behind customers’ cash flow issues.

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Artificial intelligence (AI) has transformed how the world operates, integrating itself into nearly every facet of business. For credit departments, AI is being used to enhance email communication, draft demand letters, review contracts and even predict collection trends. 

Despite its rapid advancement, AI presents significant challenges, particularly regarding accuracy and reliability of information and data privacy and security. Implementing clear, refined policies and procedures within the credit department can help mitigate these concerns and ensure AI is applied ethically and effectively. 

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As a credit manager, you’re no stranger to difficult customers. Whether there is a disagreement over a late payment or a clash over company policies, conflict can pop up anywhere in a credit manager’s day to day work. Mastering emotional intelligence can help credit professionals de-escalate conflict and ease tensions. 

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This week we are talking about building relationships outside of the credit department!

The last decade has seen tremendous evolutions within the business credit field, with advancing technology transforming the credit management profession. With technology’s growing importance in modern credit processes, the relationship between credit and IT departments is more important than ever.  

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We’re diving into one of the most valuable tools available to global credit managers—the FCIB Credit & Collections Survey.

The monthly survey serves as a global pulse check on real-world credit conditions. It gathers input from credit professionals across key international markets, on things like payment behavior, risk levels, and economic confidence. The Credit and Collections Survey’s insights help you stay informed, benchmark your practices, and even support your internal reporting.

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The construction industry is a layered ecosystem where giants and startups share the same job site, each with unique risks and rules. In a highly competitive industry, the Disadvantaged Business Enterprise (DBE) Program provides marginalized businesses with a fair opportunity to compete and thrive. 

However, rising fraud, such as firms posing as DBEs or using certified DBEs as pass-throughs, undermines the program’s purpose.  

To protect the integrity of the program and avoid serious penalties, it’s essential that credit managers to double check and verify if the DBE is legitimate and it’s performing the work it’s contracted to do 

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The CMI documents trends in accounts receivables that could help credit professionals anticipate and prepare for changes. By taking the time to complete the CMI each month, credit managers are able to give back to the profession by strengthening an economic indicator that is central to so many credit professionals risk mitigation strategy. 

Connect with us on LinkedIn: @Nacm-National @FCIB