The True Cost of Hiring Good Credit Professionals, by Michael C. Dennis

A friend of mine was told by a headhunter that she was overqualified for a position.  What does it mean?  Usually, it is code for: (a) you are too expensive or (b) you are too old.  If we give the hiring company the benefit of the doubt, we are left only with (a).

In my experience as a consultant, many companies fail to understand the potential costs of a bad hiring decision in credit management, which include but are not limited to:

•         Higher bad debt write offs [not risk averse enough]
•         Missed sales opportunities [too risk averse]
•         Higher DSO and A/R carrying costs [inadequate follow up, or poor negotiating skills]
•         Damaged goodwill [with customers, and internal customers such as Sales]

There is an old saying:  If you think it is expensive to hire a credit professional, wait until you hire an amateur.

Michael is the author of the Encyclopedia of Credit (www.encyclopediaofcredit.com), a free, fast, internet resource for credit and collection professionals.  He is a consultant, and the author of “Credit and Collection Forms and Procedures Manual” as well as a frequent instructor at CMA-sponsored educational events.  He can be contacted at 949-584-9685.

2 Replies to “The True Cost of Hiring Good Credit Professionals, by Michael C. Dennis”

    1. An unfortunate reality for many today Michael. Several suggestions:
      1. Project that you are a business professional with credit and collection management expertise: Dress and behave like a business professional. If you portray yourself as a “Back Room” manager, then why are your years of experience and higher salary demands reasonable?
      2. Keep updated, don’t be lazy: Understand current business trends and how they are affecting the target company. Be sharp on the basics of your function. In conducting interviews for a client recently I asked Corporate Credit Collection Manager candidates how they calculate several common metrics, including DSO. One of four interviewed had a clue. Understand and communicate the bigger picture affecting the success of the credit collections area, How do other departments impact the function, what are the tools of the trade, how best to keep networked to stay on top of “Best Practices”.
      3. Take the focus off the expense, it is the return on the investment that is important. Do some advance research to understand the issues of concern at the target company. Demonstrate how you can increase AR turnover, lower expenses and AR carrying cost, improve productivity, customer care and revenue opportunity.
      Start with these three things and suddenly you are not so expensive. You bring value and are an investment.

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