Survey Says: Sales Can’t Override Credit, Both Work Best as a Team

According to a recent survey, “In your company, can a sales team overrule a decision by the credit department?” the
majority of respondents noted that sales cannot overrule their department’s credit decisions, with 60.7% of participants answering “No.” However, while a still sizeable 39.3% answered “Yes” to the survey question, many of these respondents noted that the occurrence of a sales override over credit is exceedingly rare and happens when a member of a sales team or upper management has a relationship with the customer in question.

The type of account upon which sales tends to override credit is also similar among participants, with many of them noting that, in many instances, sales will override a credit department’s decision regarding marginal accounts. Many “yes” respondents also noted that sales overrides cannot be done whenever sales finds it necessary; most of them require the approval of a vice president or officer of the organization and some also require that the customer meet certain previously agreed-on creditworthiness criteria.

There were some participants, however, who noted that, in their opinion, sales can often function and overrule a credit department decision without any prior approval whatsoever. “The local sales managers or the general sales manager can and do override credit decisions with no impunity or consequences,” said one respondent. “Creditworthiness is not a concern, only the sale.” When asked to characterize their credit department’s
relationship with sales, the aforementioned respondent noted that the relationship is “good, as long as sales gets their way.” This sentiment was echoed by a number of other respondents whose credit decisions can
be overridden by a sales team, with many noting that their relationship with sales is “combative” and “adversarial.” In one instance, a participant simply responded by asking, “What relationship?” Another respondent, who answered the question positively, noted that sales’ decisions to override have taken their toll: “After 20 years of dealing with marginal credit and tons of collection problems, I am rundown and about ready to give up and retire.”

A large portion of respondents noted that, while sales does have the ability to override a credit decision and make a sale, for the most part, the sales and credit teams work together to come up with an agreeable solution to the problem. “The main objective is to find that unique balance between sales and credit,” said one respondent, who also noted that, at their company, “There is mutual respect between credit and sales. I am very fortunate to have the support of sales, as well as upper management, especially in this economic climate we are currently working in.” The economic climate was also cited as a reason for why, in the last several months, many sales people have stopped overriding to make sales and taking greater heed of what the credit department has to say. “It is not happening as much as it used to happen,” said one respondent. “Economic times are curbing their recklessness.”

 

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