Business Practices Archive

With high inflation, increasing energy costs and interest rate hikes, customers are pushing back on set payment deadlines to preserve their cash flow. As customers seek longer payment terms to preserve cash, credit managers must balance customer needs with the risk of delayed payments.

If credit management were a team sport, the policy would be the rulebook, and procedures would be the playbook. Any change to the game plan, whether in policy or procedures, may require amendments to the other. But when one changes and the other doesn’t, the result can be confusion, inconsistent decisions or unnecessary risk.  

Businesses don’t crumble overnight—it’s often a cascade of smaller problems that go unnoticed. These issues can multiply and have lasting effects on even the most affluent of corporations. Credit managers who attended FCIB’s July European Credit Executives Network briefing learned about signs of financial distress from customers and how to spot them early.

Nothing represents the ebbs and flows of customer relationships like disputes and deductions. Customers flagging issues and short paying their invoices are to be expected. While it may feel like a hassle for credit managers, it is really an opportunity to examine what is and isn’t working in the order-to-cash cycle.  

Knowing your customer is a core tenet of credit management. Getting to know your customer is not a single step taken at the outset of the relationship, but an ongoing process. When a customer is acquired by another company, there are several factors that go into learning the new business and reassessing risk.

Working in credit, the importance of knowing your customer cannot be overstated. From learning their payment habits to the trends in their unique industry, there is a lot of value in getting to know who you’re working with and the risk incurred through the relationship.

Most people associate credit with approving accounts and collecting invoices, but credit professionals often have unique visibility into the risks hidden within customer agreements and can identify issues before a contract is signed. 

Working in credit can sometimes mean juggling many responsibilities at once. From the overflowing email inbox to the back-to-back meetings, your days in credit are often packed with so many urgent tasks that it can be hard to stay on top of it all.   Why it matters: With so much on your plate, it is easy to feel overwhelmed by your ever-growing to-do list, especially when unpredictable fires pop up and throw all your plans out the window. Effective time management not only helps you stay on top of your work but creates a better balance to help ease stress. Each day in credit…