One thing most commentators agree is that we are in for a difficult time in business in the coming year, and as you are reading this, you are most likely the person responsible for the credit function in your business and as such you are charged with protecting your business from the twin threats of late payment and non-payment, while maintaining a pro-business approach in a competitive and fast moving world. To make this happen, you now have to be more vigilant and proactive than ever.

New threats bring new challenges that require new methods. There are a number of pointers I would like to give you to help you along the way: Most credit professionals look at overdue accounts and accounts that are over the agreed line of credit allocated to each customer and make their decisions based on this.

Going forward you need to think in three dimensions – the past, the present and the future.

The past is what is described above, The present is any imminent order the customer is about to place with you and, The future is a picture of your estimated exposure, should the current trends persist. Failure to act in this way will result in a future of putting out fires and bouncing from one crisis to another.

Relying solely on financial information that is between one and two years old, is not the best way to manage the risk, particularly where your exposure is high. You must become more proactive. As a member of AICDP, block off time to network and to tap into the wealth of knowledge and experience within the Association. Seeking help, is not a sign of weakness, it is a sign of strength!

Building a strong network of trusted professionals around you is important in business at any time, and even more important in difficult times. Current trends of either working from home or working in the office, staring into a screen most of the hours in the day, is not enough to proactively manage credit. You have to develop strong working relationships with the key people in your major customers, and this cannot be done effectively, sitting at a screen or firing off emails.
With so much of your life currently online, you need to strike a balance between electronic and personal communications, and while the phone and Zoom serve their purpose. In person is so much more effective and as you are planning the weeks and months ahead, build in time to spend with your key customers and with key people in other departments within your business.

It is only with an in-depth knowledge and understanding, that you can make the best decisions for your business, and this is always better in person.