The economy is in a recession and companies are looking to cut back
on expenses. Credit managers should constantly be on the lookout
for ways to cut costs, while at the same time improving the department's
overall effectiveness. Here are 9 ideas that can help your department
to run more efficiently:
Remember that people are any credit department's
most valuable resource. The time spent teaching, coaching and encouraging
subordinates will pay dividends in terms of improved performance,
lower absenteeism, and lower turnover rates.
Always shop around for the best price on outside
services the credit department uses such as collection agencies,
attorneys and credit reports. In many instances, charges are negotiable
- particularly with collection agencies.
Use the Internet to gather financial information
on publicly traded customers since Internet web sites are normally
free and credit reports are not.
Surround yourself with the best and brightest
people you can find and hire. Don't be intimidated by subordinates
who know as much or more about their particular area of specialization
than you do.
Try to limit bad debt losses by periodically updating
every active customer's credit file.
Refine the automated order review and approval
system so that fewer orders are placed on credit referral. This
frees up time for collecting, analyzing customer files, negotiating
with delinquent debtors, and addressing deductions and disputes
Join one or more industry credit groups. The expenses
of membership are usually more than offset by the information members
share with one another.
Delegate work to others. Even if it takes a subordinate
twice as long to complete an assignment, on an hourly basis the
company is probably still better off having them do the work than
you - not to mention the time that you free up can be put to use
on assignments requiring a higher degree of skill and experience.
Ask subordinates for ideas and suggestions when
problems arise. It is a mistake to believe that you are the only
person in the department capable of making suggestions that would
make the credit department faster, or would result in cost savings.