Master of the Matrix, Master of the Cs

The entry level CMA webinar, “The Art of Credit Management,” presented
by Eddy Sumar, MBA, CCE, CICE, of ERS Consulting Services, was aimed at
providing the groundwork for success for credit department members. In it, he
discussed his theory of the 18 basic “Cs” of credit, the credit matrix and
creating a fundamental checklist that every credit professional should keep in

“I really believe, as credit professionals, we are artists,” said Sumar.
“That’s why credit management isn’t a science, it’s an art.”

The first step in Sumar’s process was to look at the word itself. Credit is
defined as a cooperative function between seller and buyer, or between creditor
and debtor, that is based on agreed upon terms and mutual trust for both parties
to deliver on their promises.

“This is how we define credit in the traditional way,” explained Sumar. “But
in order to become masters of our destinies and masterful at the art of credit
management, we need to redefine credit.”

He explained that credit is a sales tool and a marketing tool, and needs to
be recognized as four-dimensional as a financial vehicle and as a strategic
alliance. By looking at credit as possessing those four functions, he explained
that it creates a better understanding of the connections between the credit
executive, the credit department, the customer and the company.

“My motto is that as a credit person, I should be sales sensitive,” explained
Sumar. “Likewise, a sales person should be credit sensitive.”

He said that the primary objective of a credit executive is to understand the
vision of the company for which they work for, then figure out if there is a
vision for the credit department. Credit professionals must understand the
company’s culture as well, and its policies and procedures.

“It’s imperative, to be successful at credit, to understand the vision of the
company,” said Sumar. “You’ll be surprised by what credit extensions you offer
and all the credit offerings that you have. They are linked—directly or
indirectly—to the vision of that company and to where the company wants to go.
By understanding the vision of the company, you will create and carve a vision
for your department.”

Sumar’s credit matrix is a simple, fundamental chart with four quadrants:
“Able and Willing,” “Able and Unwilling,” “Unable and Willing” and “Unable and
Unwilling.” The purpose of the matrix is to help credit executives and sales
people to make quick decisions on a customer.

“Now, I think this is a very crucial matrix because it is going to tell me,
how do I follow the lead? Where do I concentrate my efforts?” explained Sumar.
“Let’s say I am a sales person, credit person, or a collector. Where do I want
to target? I always recommend to go from Able/Willing to Willing/Unable.”

“Ability and willingness ultimately fall onto character,” added Sumar.
“That’s why I always say become a master of the matrix, because the matrix helps
you classify your customers as to character.”

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