Building Bridges Between Sales and Credit

The relationship between sales and credit can be contentious at times. Problems may have festered, resulting in strained working relationships between sales and credit.  Regardless of the current state of relations in your organization between the credit department and the sales department, these tips will help your department to build bridges and mend fences with sales:

• Recognize that not every good business decision is a good credit decision.  Of course, the credit department staff will not make these types of decisions… but if a credit decision is overruled by senior management the credit team must recognize that sometimes the needs of the company, the customer or the sales department will come before the needs of the credit department.
• Respond immediately to inquiries from sales.  Chances are good that the reason they are contacting you is that a customer is contacting them.
• Try to communicate with sales by phone or in person.  Emails and IMs are convenient, but impersonal.
• If someone in the credit department makes an incorrect decision such as one that involves a credit limit that is too low, override the decision quickly and move forward.  The worst mistakes are ones that are repeated, not mistakes that are found and addressed quickly.
• Take as much time as necessary to explain the rationale for your decision.  Try to do so without using too much accounting jargon. 
• Ask to become part of the orientation process for new salespeople.
• When there is a difference of opinion about a customer, share all of the relevant facts with the salesperson including information that strengthens the sales department’s position. 
• Don’t blame sales for talking you into making a credit decision that goes bad.  Credit decisions are not the responsibility of the sales department, but the salesperson does have a responsibility to be an advocate for an active customer or a credit applicant.
• Work proactively with sales to approve higher credit limits for selected customers before orders are submitted and your company is embarrassed to admit that one hand does not know what the other is doing.
• Develop a mechanism by which a salesperson can appeal a credit decision they stronly disagree with. Without such a mechanism in place, a salesperson can be forgiven for being resentful of the authority and the autonomy of the credit decision making process.

The process of improving working relationships requires some unique abilities.  One is to offer sincere apologies for mistakes in action and judgement that have occurred on both sides.  Another is to forgive what has happened in the past.  A third is to develop a shared understanding or vision about how the credit and sales teams can work cooperatively in the future for the benefit of both departments and for the company as a whole.

© 2011.  Michael C. Dennis.  All Rights Reserved.  Michael is the author of "Credit and Collection Handbook."