Credit managers manage risk. Therefore, I think credit managers need to actively seek out “bad news” from their collectors. Small problems can be used as opportunities for credit administrators and collectors to learn more about how to manage risk and collect past due balances more effectively and more efficiently. It’s clear that credit administrators are far more likely to report good news than bad, but that tendency is exacerbated when managers tend to either (a) shoot the messenger, or (b) ignore bad news or (c) cannot offer advice and guidance about how to address and resolve the problem.
One resource that CMA members have to help them seek out this “bad news” is the Industry Credit groups which are intended to help companies in the same vertical market get the most complete picture available about their customers.
Actively seek out bad news and use the information as an opportunity to learn, and to train others, and to improve processes and procedures.
Have you used CMA’s Industry Credit Groups? Did they help? As always, I welcome your feedback.
Michael Dennis 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.