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Ten Ways to Run The Credit Department More Efficiently
By Karen Buckinham

Credit professionals should constantly be on the lookout for ways to cut costs, while at the same time improving the overall effectiveness. Here are ten 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 do price comparison on big-ticket items such as collection agency contingent collection fees, hourly rates for attorneys, and for credit reports. In each of these examples, prices are negotiable.

  • Use the Internet to gather to quickly obtain financial information on publicly traded customers.

  • Surround yourself with the best and brightest people you can find. Don't be intimidated because your subordinates know as much or more about their area of specialization than you do.

  • Limit bad debt losses by periodically updating every active customer's credit file.

  • Try to refine the automated order review software so that orders that do not need to be reviewed do not end up in the credit queue taking up valuable time - and delaying order fulfillment.

  • Join an industry credit groups to stay current on current as well as prospective customers. The total annual costs associated with membership can easily be offset if just one bad debt loss is averted.

  • Delegate work to others whenever practical. This will give you more time to spend on assignments requiring a higher degree of skill and/or expertise.

  • It is a serious mistake not to solicit input from your subordinates about how to handle problems involving accounts they handle on a daily basis.

Karen Buckingham is a credit professional with ten years experience dealing with consumer as well as commercial customer accounts. She resides in Southern California, and is employed by Solar Service Company.

Reprinted with permission from the© 2002 Covering Credit Newsletter 8/13/02 Edition,
All Rights Reserved.

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