Survey: Thirty Percent of Credit Departments Are Understaffed

Editor’s note: The following article originally appeared in Credit Today, the leading publication for the credit professional, a CMA Partner. Click here for Special CMA Member $10 Trial!

Thirty percent of today’s credit departments are understaffed, according to data from Credit Today’s soon-to-be-released Staff Benchmarking Survey. That is despite a significant ramping up of staff sizes in comparison with seven years ago, during the depths of the Great Recession.

Credit Today has been working diligently behind the scenes for some months now putting together its most comprehensive Staff Benchmarking Survey ever, and here’s the first unveiling of data from this significant industry survey.

Just How Short?

Of those departments that are understaffed, it would require, on average, 4.1 additional staffers to get them up to where they’d like to be. This is up markedly from 7 years ago, when the average shortfall was pegged at 1.7 staffers. Digging a little deeper, we find that consumer products manufacturing credit execs — in particular the larger firms — are facing the greatest staffing shortfall.

Understaffing Impact on DSO

The second big takeaway from this stat is a comparison of the DSO of those who are understaffed with those who are fully staffed. Companies whose credit departments are understaffed have a DSO 3.3 days higher than those describing themselves as adequately staffed.

We can’t say definitively whether the under-staffing is the cause of the higher DSO — certainly many variables come into play — but a staffing shortfall leaves credit departments unable to manage A/R as effectively as they could and DSO is certainly likely to suffer as a result.

Our belief has always been that at a well-run credit department, staffing is an investment that pays dividends and this statistic bears that out.

Top management — when considering the costs of staffing — ought certainly to also factor in the costs of DSO, as well as all the other profitability metrics associated with well-run receivables.

The following table breaks down the relationship by industry.

Stay tuned for the formal release of this survey — and much more in-depth data — soon!

This article originally appeared in Credit Today, the leading publication for the credit professional.
Click here for Special CMA Member $10 Trial!