- Home
- Bankruptcy and Bankruptcy Code
- Business Entities
- Departmental Operations
- Allowances
- Bad Debt Write offs; Bad Debt Losses
- Calculating Bad Debt Reserves
- Bad-Debt Write Offs; Uncollectible Accounts Receivable
- Computer Skills and the Credit and Collection Function
- Consignments; Consignment Sales
- Credit and Sales; Using Salespeople as Collectors; Team Based Account Management
- Credit Department and Organizational Structure
- Key Activities of the Credit Department; Role of the Credit and Collections Department
- Credit Department Goals and Objectives
- Credit Department Organization; Centralized vs. Decentralized Credit Operations
- Credit Policy Overview
- Divestitures
- Downsizing the Credit Department; Planning and Pitfalls; Outsourcing
- Economic Downturns; Recessions; Layoffs
- Electronic Data Interchange (EDI)
- Finding, Attracting, and Retaining the Best Employees
- Escalating A/R Problems to Management
- The Credit File; Keeping the Credit File Current
- Improving Inter-Departmental Relationships
- Lockbox; Bank Lockboxes; Improving Cash Flow
- Motivation and Performance
- UCC 1 Perfection by Filing
- Required Areas of Knowledge for a Credit Professional
- Impact of Bad Debt Write Offs; Bad Debt Losses
- Shipping Procedures
- Improving the Effectiveness and Efficiency of the Credit Function
- Building Bridges Between Sales and Credit
- Dormant Accounts
- Training Collectors
- Customer Retention
- Working Proactively in Credit and Collections
- Goal Setting for the Credit Department
- Myths about Credit Management
- Credit Practices
- Collection Practices
- Financial Analysis
- Financing Methods
- International Credit
- Laws and Regulations
- Payment Methods
- Performance Measures
- Security Instruments
- Career Management, and Job Change
- Credit Website Tools
- Upcoming Educational Events
- Credit and Collections Tools and Tips
- Tips on Creating Better Emails
- Generating Effective Credit Correspondence
- Exporting
- Accounting
Customer Retention
Establishing a relationship with a new customer is challenging, and so is retaining customer goodwill once a business relationship has been established. Customers often require a high level of after-sale service and support, in addition to quality products at competitive prices that are delivered on time. Companies recognize that it is far more expensive to find, contact, pre-qualify and establish a relationship with the potential new customer than it is to find ways to keep existing customers happy. Therefore, maintaining customer goodwill is important in every department in the company - including the credit department.
The credit department's biggest challenge is maintain the integrity of the credit decision making process and the safety of the company's investment in accounts receivable while doing as little damage to the business relationship with customers as possible, especially when one considers some of the tools credit managers use including:
- Credit holds,
- Reducing credit limits,
- Shortening credit terms,
- Withdrawing open account terms,
- Demanding some form of security or the pledge of collateral,
- Requiring customers to send their financial statements for evaluation.
© 2010 by Michael C. Dennis and Dorothy Siegel. All Rights Reserved