Reactive Downsizing Has Limited Upside

Caution Downsizing
Caution Downsizing

The economy has many companies evaluating downsizing the credit function. Employers rationalize this by defining credit and collections as either (a) a cost center or (b) as a “non core business function.” Since account receivable is often a company’s largest Current Asset, concerns about staff reductions in credit and collections are well-founded.

Downsizing affects effectiveness. Even with careful re-allocation of resources, it may simply not be possible to do the work necessary to control delinquencies and manage credit risk effectively. Some employers are so focused on cost cutting that they are willing

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

to overlook the increased risks associated with reactive rather than proactive credit risk management.

Maybe your company has already downsized. If so, what was the result?

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