Tag: Business Practices

Days Sales Outstanding (DSO) is the most frequently reviewed key performance indicator (KPI) by upper management, representing the average number of days it takes a company to convert its accounts receivable (AR) into cash.

Credit management is a complex, multi-faceted career that relies on a host of cross-functional skills. Each day, credit professionals carefully assess unique problems to create solutions that protect their companies from risk without hindering growth. There is no specific path for a budding credit manager, and they can come from a host of different professional backgrounds.  

It’s no secret that companies across industries are grappling with the ripple effects of shifting supply chains, severe weather events, rising costs and mounting tariffs. This economic volatility can significantly impact businesses by creating unpredictability in customer behavior, supply chains and financial planning. 

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.

From negotiating bedtimes with children to negotiating the price of a new car, negotiation—a strategic discussion aimed at reaching a mutually beneficial agreement—plays a key role in many aspects of life.

In person customer visits, face-to-face meetings between a representative from your company and your customer at their location, are becoming less common. Video conferencing platforms like Zoom and Microsoft Teams have reshaped how businesses interact with customers, providing more convenient and cost-effective solutions.

When considering the work of a credit manager, it is impossible to overstate the importance of interdepartmental communication, especially when it comes to the relationship between credit and sales. While the two departments work in tandem, with the sales team securing customers the credit team will then manage, in some offices, the two can be a bit isolated.