Top 10 New Year’s Resolutions for Credit Managers

New Year’s resolutions often symbolize a fresh start and a commitment to improvement—a chance to become the best version of yourself in both your personal and professional lives. As we approach the New Year, credit managers are presented with limitless opportunities for growth and success.

Here are the top 10 resolutions chosen by credit managers for 2024:

#1 Process Improvements  

A recent eNews poll revealed that almost every credit manager hopes to focus on process improvements in the New Year. It’s an umbrella term that refers to the enhancement of existing workflows. Yesterday’s credit processes may not work for tomorrow and credit professionals across every industry must critically analyze current processes and identify bottlenecks or inefficiencies. Merry Duan, senior strategic account analyst at Bayer Corporation (Saint Louis, MO) is searching for process improvement opportunities to make operations more efficient. “Achieving these goals not only enriches my working experience and professional knowledge but it helps promote broader responsibilities, which adds value to support the customers internally and externally.”

#2 Automate More Credit Tasks and Explore AI 

Automating more credit tasks stands in second place as it frees up valuable human resources for strategic thinking and relationship building. As different forms of artificial intelligence (AI) gain popularity in the finance sector, credit professionals must become experts on how AI can support their role and simplify workflow. “We’ve invested in AI software that will reduce the amount of time spent on various credit functions, increasing productivity with the same headcount,” said Carl Davidson, director of credit and collections at Blue Water Industries LLC (Jacksonville, FL). “AI can review customer information, retrieve credit reports and references and prevent fraud by accurately confirming if a company is valid or not. AI also helps AR clerks with high volume workload such as application of checks day-to-day.”

#3 Clean Customer Data 

Clean customer data is crucial as it forms the foundation for accurate decision-making. In data-driven industries like credit, it is at the basis of risk management decisions. Dirty data can impose a significant risk to both your customer and company and can possibly have legal consequences. To prevent that, credit professionals must constantly analyze data to ensure it is up to standards. One way is making sure you are verifying customer data more often and involving others in the process. Krista McClain credit manager at Frenchman Valley Coop (Imperial, NE) has the salespeople do this every time they talk to someone. “I am going to do credit risk assessments more often to keep myself accountable for the debt that we do have,” she said. 

#4 Develop Leadership Skills 

Finding and developing your leadership style is a journey of self-discovery and continuous growth. By recognizing your natural tendencies while adapting your style to different situations and teams, you can develop a leadership approach that resonates with your authentic self while effectively guiding and empowering others. “Being positive and open-minded in embracing new ideas and opinions from others is critical as a leader,” said Duan. “Active listening and effective communication are very important soft skills in the credit management profession.”

#5 Lower DSO 

This last year experienced an economy branded by inflation, high interest rates and volatility—all factors that can negatively weigh on days sales outstanding (DSO). However, it is important to note that DSO is highly influenced by sales. When DSO is supplemented with other metrics—like average days delinquent, true DSO or weighted-average days to collect—it can paint a more complete picture of AR performance. If you must track DSO, use it in a way that sheds a positive light on the credit department. For example, DSO can provide the value in dollars that you are adding to the organization. Calculate the number of days in DSO your department has improved over a period and convert each days’ worth of DSO to a days’ worth of revenue for the company. 

#6 Gain Recognition from Upper Management 

Credit decisions play a massive role in the success or downfall of a company. To gain recognition from the C-Suite, credit managers must be strategic and make decisions that coincide with the company’s vision. Be sure to show upper management just how vital the credit department is to business success. “Without credit, less is available for growth and the strategic needs of the business,” said Andrea Bohr, CCE, chief financial officer at W.J. Sapp & Son, Inc. (Jacksonville, FL). “Without funding to invest in the best people and technology, innovation and creativity are lost. Creditors enable genius talent with funding needed to create, engineer and explore ways to improve our daily lives.”

#7 Earn a Designation and Invest in Education 

Whether you hope to secure a promotion, a raise or greater respect in the credit industry, it’s crucial to demonstrate your dedication to your profession. By earning a designation through NACM’s Professional Certification Program, credit managers can elevate their careers and showcase their expertise. An independent study of NACM members revealed those who hold certifications average 6% higher salaries than those who do not, and many credit managers hold more than one certification. 

#8 Reorganize the Credit Department 

A credit department that remains static risks falling behind, unable to address emerging challenges in the ever-changing industry of B2B trade. Periodic reorganization provides an opportunity to assess the skills and expertise within the credit department. By aligning roles with individual strengths and fostering a culture of continuous learning, organizations can nurture a high-performing team. Change management, a systematic approach to dealing with the transition or transformation of an organization’s goals, processes or technologies, is a way to implement strategies for effecting change, controlling change and helping people to adapt to any departmental, company or industry-wide changes. Workload also needs to be continually monitored to make sure it is evenly distributed because situations can change at a moment’s notice. 

#9 Strengthen Relationships with Customers (Inside and Outside Your Company) 

Building strong relationships with customers, both within and outside the company, is crucial for fostering loyalty, trust and a positive brand image, ultimately contributing to long-term business success. Working cohesively with sales is top of mind for credit professionals in the New Year, but as the traditional role of credit changes, other departments become important to collaborate with as well. “We work together with other departments in getting the information we need from customers to achieve our goals,” said Alisha Gray, purchasing manager at Orgill Inc. (Collierville, TN). “Communicating and collaborating with customers helps us to know what needs to be done to achieve our goals as well.”

#10 Prepare a Succession Plan Before Retirement 

The structural makeup of the labor force is about to drastically change as baby boomers are expected to retire at high rates. As older generations retire, deep industry-specific knowledge goes with them, a phenomenon known as the “knowledge drain” or “brain drain.” Building a succession plan will not only ensure that the next generation of professionals are prepared for the job, but the company is less likely to suffer from a loss of a tenured employee. “The responsibility of the older generation is to provide a foundation of knowledge and experience for the younger generation so they can incorporate their own personality and style into credit management,” said Diana Crowe, CGA, regional director at NACM Southwest (Coppell, TX). “Just because we’ve done something for decades and it’s worked fine, doesn’t mean there still isn’t a better way.”

Tips to Meet Your Goals in 2024

Keeping resolutions is easier said than done as credit managers are consistently challenged to meet their goals. “For any professional, I always recommend using the rule of what is obtainable versus what’s impressive,” said Hailey Zureich, certified life coach and corporate trainer at ZHailey Coaching, LLC (Ferndale, MI). “Each goal must be clear and reasonable for the individual based on their limitations to be successful. And always be adaptable. A lot of things change for the better or due to circumstances outside of your control.”

Credit managers can stay motivated to meet their goals by following a cycle of productivity, a five-step process for completing a goal started by the conception of the idea or project. After that, the preparation period begins where you plan out what you’re supposed to do to achieve that goal followed by the execution of those tasks.

The next two steps—which many people skip—are the celebration and reset periods, Zureich said. “By celebrating what you’ve done instead of breezing over to the next goal will help you remember what you’ve accomplished as well as provide evidence of what you’re capable of. It can be as simple as getting yourself a cup of coffee or leaving work earlier.”

Resting after accomplishing your goals is just as important. “More people are struggling with mental and physical health because they are constantly pushing themselves to stay productive,” said Zureich. “Failing to rest before moving on to the next project can lead to burnout where people are too exhausted to do the most basic things, which is one of the top reasons people are leaving jobs and switching careers.”