Thanks to all the credit practitioners, industry experts, and industry partners who participated in the many valuable conversations at CMA’s recent CreditScape Summit. Our goal was to create an interactive, collaborative learning environment, and I was so pleased with the high level of sharing among all participants throughout the two-day event.
I was equally pleased with the audience response to facilitator Bob Shultz’s approach to process improvements within what he calls the Cash-to-Cash cycle. Also known as the cash conversion cycle, Shultz emphasized that the role of credit management extends beyond basic credit and collections processes. There is the opportunity to impact the company’s liquidity through good inventory and accounts payable management, in addition to traditional accounts receivable management. Collections trainer Bart Frankel recommended that credit people take responsibility for helping to resolve issues that arise out of these “other” departments, as they ultimately impact the credit department’s effectiveness in granting credit and collecting receivables.
Experienced credit practitioners and other credit industry experts shared specific examples of how they successfully influenced and improved processes across the Cash-to-Cash cycle and created more cash flow from operations.
Another example of how CMA is advocating for the expansion of the traditional role of credit within the enterprise is the suggestion that credit can support procurement in evaluating the risk of critical suppliers. Recently, I had the unique opportunity to participate as a panelist in the fourth annual Global Supply Chain Management Conference at USC’s Marshall School of Business. As panel moderator, CMA Member Alvin Moreno, Director of Global Supply Chain Credit Risk with Nestle USA, made the case that the credit department is best positioned to help the procurement department assess the financial stability of a company’s suppliers. In the wake of shipper Hanjin’s bankruptcy, supply chain disruption has continued to grow as a concern for companies that rely on critical suppliers, which gives credit the opportunity to add new value to the business.
As a panelist, I told the audience of supply chain professionals about how CMA has worked with Alvin, his team at Nestle USA, and other CMA Members to create a special credit group in which credit managers collaborate on processes and best practices in supplier risk evaluations. More information about that collaboration is here.
Clearly, we at CMA are big fans of process improvement through collaborative learning. But as I mentioned in my opening remarks at CreditScape last week, credit managers need to step up and become credit leaders if they are to be successful in driving the organizational changes necessary to make those process improvements a reality.
How are you leading change in your organization? I welcome your feedback.