Opportunity Is Knocking – Michael Dennis, CBF

Opportunity Is Knocking
Opportunity Is Knocking

Today’s business climate provides an excellent opportunity for credit managers to refine and sharpen the collection and risk management skills and to refine the process within their departments. 

Credit managers across all industries face continual pressure to:

  • (1) reduce DSO
  • (2) minimize bad debt losses
  • (3) offer more reports, analysis value-added services to internal customers or to their senior management team. 

Unfortunately, many credit managers spend so much time on items 1 and 2 that they dedicate far less time to item 3 than it deserves.

Improving the effectiveness and efficiency of every task performed in the credit and collection function has become more important than ever. The current economic climate provides a perfect opportunity for credit professionals to redesign and refine credit department operations including:

  • The risk mitigation process
  • The collection process 
  • Dispute management 
  • Process automation 
  • Develop more collaborative relationships

One new task that the credit department is ideally suited to accept involves evaluation of the financial health and viability of potential suppliers, as well as existing suppliers.  The impact on an organization when a single source supplier fails to deliver products on time, or worse, or goes out of business can be devastating.  It takes very little imagination to see how the information resources available to the credit department combined with the financial statement analysis skills can be used to evaluate the financial condition and long-term viability of a supplier.  This information provided by

Michael Dennis, MBA, CBF, LCM
Michael Dennis, MBA, CBF, LCM

the credit department to purchasing/procurement could be used to proactively manage this risk.

Opportunity is knocking – do you see other opportunities for credit at your company?

Michael Dennis’ Covering Credit Commentary. Michael’s website is  www.coveringcredit.com

The opinions presented are those of the author.  The opinions and recommendations do not necessarily reflect the views of CMA, or their Officers and Directors.  Readers are encouraged to evaluate any suggestions or recommendations made, and accept and adopt only those concepts that make sense to them.