Students sometimes ask what I see as the major changes that will
take place in the typical credit department of the near future. Unfortunately,
I foresee a number of significant challenges [and not much good news]
on the horizon for credit professionals. I believe that in the future
credit departments will:
Be centralized, rather than decentralized.
Have fewer total employees.
Involve some companies outsourcing the credit function as a "non
Involve some companies folding the credit and collection department
into customer service/customer support.
Be more fully automated.
Use sophisticated credit scoring software to identify problem
Use collection management software to prioritize and automate
the collection process.
Involve the use of deduction management software.
Involve automated financial statement analysis.
Use artificial intelligence to screen orders pending in order
to identify only those that truly need personal attention by the
Further automate the automatic cash application process now being
used by some companies.
Use video conferencing or webinars rather than requiring attendance
at industry credit group meetings
What does this mean for the average credit manager? I think credit
professionals need to redouble their investment in their own professional
development. Credit managers should stay current with technological
changes, and embrace the changes that reduce cost and headcount and/or
make the credit department more efficient and effective.