There are many benefits associated with joining an industry credit group. In my opinion, one of the best reasons to do so is to make certain that your company’s tolerance for credit risk is similar to other companies selling to common customers.
I am all in favor of leading rather than following, and I fully support the idea that credit decisions need to be made independently and in a manner that does not violate antitrust rules. However, I assume and expect that I will benefit from knowing how other creditor companies have assessed the risk associated with extending credit to a common customer.
I think the opportunity to understand how other creditors evaluate/ assess credit risk is probably the most under-appreciated benefit of credit group membership.
Credit Management Association offers more than 40 industry credit reporting groups. In my career, I’ve been in several groups. As a result of what I have learned from others, I’ve saved my employer tens of thousands of dollars over the years. How have credit groups helped your company? I welcome your feedback.
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.