Improving the Effectiveness and Efficiency of the Credit Function

A great deal of time and attention has been put into finding ways to improve the credit department's effectiveness.  There are a number of ways to make the credit and collections function more effective and more efficient.  Among them are these ideas:

• Recognize the credit department staff is the department's most valuable resource.
• Within reason, do what you can to keep you best and most talented performers.
• Make the time to train, coach and mentor every member of the credit department.  Doing so will improve their morale, which will in turn improve their job performance.
• Remember that the only thing worse that losing an employee that has been trained is keeping an employee who is not fully trained and therefore prone to make errors of omission and co-mission.
• Look for ways to staff the credit and collection department with the best and brightest people you can find.
• Delegate often using this simple rule:  Tasks should be delegated to the lowest level at which they can be performed competently.
• Remember that delegation requires follow up.  Don;t drop an assignment and run.  Indicate that you are available to answer questions, and follow up periodocially to ensure that progress is being made and that the assignment appears to be on track and on time.
• Seek out new time saving software, especially software that simplifies or automates previously labor intensive and repetitive tasks.
• Periodically request or require updated references and/or more current financial statements from your active accounts.
• Don't become overloaded with the almost limitless amounts of information available to you.  Instead, try to set limits on the amount of information you review. 

© 2010 by Michael C. Dennis.  All Rights Reserved.  Michael is the author of "Credit and Collection Handbook."