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09 Mar, 2018 | Tom Danson
A successful sale attracts revenue, but for credit managers collecting the payment is not always as simple as it sounds.
Of course, the sales team don’t necessarily see it that way, a sale is a sale, but not when you don’t get paid.
Robust credit management is widely accepted as an essential element of a successful business. But focussing on minimising debt and ensuring payments are made on time can sometimes be seen as obstacles to growth by an ambitious sales team.
You may recognise this picture, and while the value of strong credit management speaks for itself, I know from my own experience in sales and business development that it can be a very real and frustrating issue for some sales professionals.
Imagine a scenario where after spending time and effort securing a new customer, and anticipating a healthy order book, the sales agent is told by the credit manager that the new account has a poor credit history and a trading relationship is not viable. Clearly both parties have the business’ best interests at heart, but their perspectives are different.
However, if the credit control department can’t collect, then it doesn’t matter how many new deals are secured, it’s the bottom line that counts in the end. But it needn’t be ‘us’ and ‘them’, credit management and sales are different sides of the same coin with the shared goals of achieving profitable sales, retaining customers and growing the business.
Many of the credit managers I meet already work closely with the sales team and take an intelligent stance on credit issues. For example, rather than simply escalating the severity of the dunning and collections processes on overdue accounts, they involve the sales team to help resolve late payment issues and avoid putting future sales and profitability at risk.
Where credit limits are reached or breached, the sales agent can step in to assist the credit management team address the problem. The partnership between credit management and sales is an effective weapon and can help to open the door to new opportunities.
Credit managers can use their knowledge to help sales expand relationships with credit worthy customers. Offering credit terms is a competitive advantage and knowing when it’s OK to extend the line of credit is a powerful tool.
How to help
Get to know your sales team and understand their strategy, but check they are clear on your procedures too;
Make sure your sales colleagues are aware of credit management activity and encourage them to keep you posted on developments they see in the market or with a specific customer;
Be proactive in sharing information on the ‘good’ customers as well as late payers;
When sales secure a new customer with a particularly good credit deal, share the enthusiasm to demonstrate collaborative success.
Ensuring that your sales team have the up to date information they need to maximise sales builds a productive partnership and one of the most effective ways to achieve a flow of information is through trade credit insurance. It provides protection against the risk of customer non-payment as well as giving your business access to a diverse array of vital business information.
Atradius risk analysts don’t just rely on readily available credit information. They use sector performance analysis and up-to-date financial data from individual companies, as well as their own contacts and buyer visits to build an accurate picture of the credit risk. With up to date, in depth business intelligence on more than 240 million companies globally, Atradius already supports businesses of all sizes and in all sectors worldwide.
This is exactly the kind of information that will help your sales team close the right deal.
Access to data alongside the broad scope of support available, from a credit insurer, enables you and your sales teams to target companies where the revenue potential is attractive and where the risk profile is right for your business.
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