Business Practices Archive

As a credit professional, conflict comes with the territory of credit management; you can’t always avoid it. It becomes even more challenging when customers are being uncooperative or responding with aggression. In these situations, credit professionals can either react emotionally or take a strategic approach to work toward a solution that benefits both the customer and the business. 

Artificial intelligence (AI) has transformed how the world operates, integrating itself into nearly every facet of business. For credit departments, AI is being used to enhance email communication, draft demand letters, review contracts and even predict collection trends. As AI continues to evolve and expand across industries, many organizations are developing formal policies and procedures to guide its use. 

As economic uncertainty rises and markets lose stability, many companies anticipating cash flow issues will be looking for areas of the budget to slash to soften the blow. Discretionary funds, which can cover a variety of professional endeavors, from education to customer visits to professional development, are often the first on the chopping block when the economic outlook looks bleak.

Bankruptcy tends to stay out of the public’s focus–and by extension Congress’s–when the economy is doing well. That’s where we are now, with unemployment rates still sitting around 4% and inflation rates mostly under control. Because of that, Congress finally allowed the COVID-era small business chapter 11 bankruptcy eligibility threshold increases to expire. There has not been a major piece of legislation introduced since January that touches Chapter 11 or 13 bankruptcies.

The accounts receivable (AR) department is a vital part of an organization’s financial health, ensuring timely payment of invoices and maintaining accurate records of receivables. However, any sudden change in business environment, size or organizational structure can drastically affect how efficiently the AR department operates.  

Credit professionals routinely make decisions that directly impact cash flow, customer relationships, and the financial health of their organizations. One small misstep, whether it’s approving the wrong account or overlooking a red flag, can lead to significant setbacks. That’s why it’s so important to have skilled, knowledgeable professionals in these roles.

The initial investigation into a potential customer’s credit worthiness is an essential step in the credit approval process, singlehandedly signifying the profession’s central goal: extending the right amount of credit that creates profit without introducing too much risk. While many credit managers are used to poring over a customer’s financial statements during this stage, many might not be analyzing as deeply as they could, unintentionally taking on more risk than intended.  

The ability to lead exists in all of us. You don’t need a title to make an impact—it’s about how you show up. But what sets great leaders apart from average ones? Over the past year, we’ve navigated economic uncertainty, from supply chain disruptions to looming trade war threats. During times like these, teams are looking to their leaders for direction.