Business Practices Archive

Over the past decade, technology has transformed how credit professionals conduct business. Automation and artificial intelligence (AI) have streamlined tedious, manual processes, allowing credit professionals to focus more on strategic, value-added tasks. However, technological advances have also led to an increase in fraudulent activity within business-to-business (B2B) credit. 

Whether you are conducting an initial credit investigation on a potential customer or reviewing the credit line for a long-held account, commercial credit reports play an important part in the decision to extend credit to a customer. Despite their usefulness, many companies are hesitant to share their accounts receivable data to commercial credit reporting companies. 

Collecting payment can be a hassle, no matter who you are. There’s nothing more frustrating for B2B credit professionals than collecting payment from customers with outstanding debt. Before thinking of sending a customer to collections—or worse, court—you have the option of sending a demand letter to communicate the severity of the issue and help prompt payment. 

For most credit managers, a credit application is a vital step in the credit approval process. It’s a document that neatly outlines all the pertinent information that a credit manager needs to know about their customer, from its corporate legal name to the number of years they’ve been in business. No step epitomizes the oft-repeated mantra of credit management, “Know Your Customer,” quite like the credit application.

As a credit professional, a large part of your job involves engaging with customers–whether they’re next door or overseas. However, the task of properly identifying a customer can be challenging when businesses operate under similar names, use DBAs (Doing Business As) or are part of a parent-subsidiary structure. Why it matters: With each new customer, it’s essential to not only understand their business but also confirm their legal identity as a formal entity in a process called, “Know Your Customer”(KYC). Knowing who your customer is from the start is paramount in assessing risk, prote…

“I remind myself every morning: Nothing I say this day will teach me anything. So, if I’m going to learn, I must do it by listening.” — Larry King, CNN. King emphasizes how much more you can learn by listening rather than speaking. However, that’s easier said than done for most people. In fact, studies show that people typically remember only about 20% of what they hear immediately after listening, with retention dropping significantly over time. Why it matters: Practicing active listening not only enhances understanding and reduces conflict, but it also boosts productivity and streng…

The credit and sales departments share a complex relationship that varies by company. While their level of interaction differs across organizations, their functions are fundamentally intertwined—credit departments vigilantly oversee accounts acquired by sales teams, evaluating both potential risks and opportunities for growth.

As credit managers, your day-to-day work focuses on maintaining the delicate balance between extending credit to customers and protecting your company from potential risk. This determination hinges on your initial credit investigation, your first deep dive into a customer’s finances, payment habits and professional relationships. Financial records play a major role during the determination of creditworthiness, offering a well-rounded and comprehensive fact-based view into your customer’s finances.