To delegate or automate time-consuming credit tasks

Most credit tasks, from reviewing accounts to managing collections to handling disputes, are inherently time-consuming due to their complexity. These tasks require a keen eye for detail, often involving manual processes, multiple data points and regular follow-ups, all of which can drain resources and slow down overall efficiency. 

Why it matters: Delegating these tasks allows credit teams to focus on high-priority activities, improve cash flow and decision-making.

Dispute resolution

The process of addressing and resolving disagreements or conflicts that arise between a business and its commercial customers is arguably the most time-consuming credit task. For example, a customer may challenge the validity of a charge on an invoice, initiating an investigation and the need for a mutually agreeable solution.

Solution: Follow up with the customer after a dispute is resolved and ask if there is anything you missed and if the purchase order was correct. “Disputes are part of the nature of business and you will always have to deal with them,” said D’Ann Johnson, CCE, corporate credit and contracts manager at A-Core Concrete Cutting, Inc. (Salt Lake City, UT).

Accounts receivable and collections

Accounts receivable (AR) management and collections go together as the most time-consuming tasks for credit managers. AR management involves tracking and managing customer payments, credit risk and disputes to optimize the billing, payments and collections process and minimizing bad debt. Collections is a key part of converting credit to cash and sustaining cash flow. The process of collecting payment can be challenging, and you may need to reach out multiple times or handle an angry customer, which can be time-consuming.  

“I have collectors who work in my department that I can delegate everyday tasks to such as calling past-due accounts,” said Tiffaney Shields, customer finance manager at Koch Air LLC (Evansville, IN). “I prioritize more urgent tasks like making orders or job reconciliation. I need to make sure that we’re signing lien waivers or releasing the correct amount. The tasks that can wait until tomorrow or the following day, such as collections, I can delegate to one of our collectors.”

Data analysis

Reporting and data analysis are important for informed decision-making, allowing companies to identify trends, optimize operations, track progress and improve business strategies. Insights from collected data can lead to better outcomes and minimizing risks. But the reporting and data analysis process requires a significant amount of manual work for some credit managers.

“We’ve developed some systems with formulas to help approximate our numbers, but they’re not as concrete as they might be for a product supplier,” Johnson said. “We face challenges in defining a consistent formula due to the varying contract terms. Some contracts might have a 45-day turnaround, while government contracts could take anywhere from 90 to 160 days. The size of the project, such as a large highway project versus a smaller local road project, also influences these timelines.”

Solution: To address this, Johnson has developed a formula that takes sales and the fluctuations in their business into account as they operate nationwide. “While we don’t experience an overall ‘slow time,’ certain regions can be slower than others, so we try to average this out,” she said. “We’ve refined this process, but it remains a bit manual. It would be beneficial to have a more automated system to reduce manual effort. Currently, we’re using Power BI for most of our management team, and I plan to roll it out to the AR team in January to help streamline some of the manual aspects of their daily tasks.”

Customer research

Research is essential for risk management, ensuring timely payments and preventing bad debts. It involves looking into public records, analyzing payment histories, checking for any changes in the company’s structure and monitoring relevant news and reports. Despite its importance, researching customers can be time-consuming.

“We spend a lot of time conducting research to identify who owns the properties we service,” said Lisa Christofano, director of billings and collections at Kings III Emergency Communications (Coppell, TX). “Research is also one of the most time-consuming and challenging aspects of our collections process, as it’s crucial for us to get paid.”

Solution: Delegating credit tasks will allow extra time for research. “I delegate to a collection lead who then has a collection team underneath her, and we work together as a team on various accounts,” Christofano said.

Credit reviews

An essential yet time-consuming task for credit managers is conducting account reviews. Typically, customer credit reviews are conducted annually to ensure that risk is being managed effectively and that compliance standards are being met. “I’m spending a lot of time on credit reviews and job reviews and making sure our lien and bond rights are protected,” said Shields.

Solution: Automate other credit tasks to save time for conducting credit reviews. “We can take the manual hours saved to invest in more personalized interactions with challenging or delinquent accounts,” said Cristella Chu, CICP, manager, global credit and AR at Premier Nutrition Corporation (Emeryville, CA). “We’ve also shifted our perspective from pursuing past-due receivables identified via an aging report to ensuring complete and error-free invoice presentment. This is possible because of the type of customers we have and the method in which we need to conduct invoice presentment. Catching invoices not properly presented allows us to minimize delays in payment.” 

Bottom line: Credit executives should consider delegating tasks that match the skill level of their team members to improve the efficiency of credit operations.