Credit management: Wrong guys for the job

Finding the right person for credit often means going outside of accounting

by Abe WalkingBear Sanchez

Prior to the start of an in-house training program on profit credit management; I took the corporate credit manager Mary aside. I explained to her that she, not I, was  the real expert on her company’s credit function and that she knew her industry, her company, and her customers in northern California much better than I ever would.

I further told Mary that I would be presenting a set of methodologies but that I would need her expert help with specifics.

Darn ladder
My people, the Hispanic Pueblo people of New Mexico tend to be short. One of my cousins,  a real short guy, was once arrested for being a peeping Tom.  They never would have caught him if it wasn’t for that ladder he’d have to drag around. He was the wrong guy for the job.

“Mary,”  I said. “How does this principle apply here at XYZ Corp.?”

No answer. 

“If we want to a accomplish our goals how would we do it?”

No answer.

All morning long, trying to  get information from Mary was like pulling teeth; it hurt. When she did say something it was to complain about something or someone. 

Over lunch the general manager said to me, “Don’t take Mary’s behavior personally, she used to be our receptionist but she was so mean and nasty to people that we moved her into credit.”

She was the wrong guy for the job.

Corporate troubleshooter
I was in Tampa doing another in-house program. South Florida reminds me of Hawaii, it’s too hot, too humid and too low. At sea level there’s too much oxygen in the air; I like it high, dry and cold.

Susan, the corporate credit manager, was a 19-year-old woman who had also been the receptionist before being moved to credit; but for very different reasons than Mary in Sacramento. Susan liked people and people liked her.

During the presentation she asked questions of me, of the CEO, the vice president of sales, the operations guy and the chief financial officer. When asked a question she gave a considered answer. What a delight. 

Over lunch I asked Susan how she felt about her job as the credit manager. 

“I love it," she said. "I get to come to work each day and talk with my friends all around the country.”

Susan’s friends were the A/P people she was contacting for payment, the sales guys who needed help in making a sale, the vendors and shippers she dealt with over paperwork or product problems. She loved it.

On my way out of Tampa I spent an hour with the CEO and Susan. This amazing woman told us about how she was getting calls from people throughout the company looking for help on  business problems not directly related to credit.

In dealing with past due customers, Susan had found that many times, 70 percent or more, the customer’s hadn’t paid because something had gone wrong and had to be fixed. 

Susan enjoyed the interface with customers, sales, accounting and finance, operations, transportation companies, vendors and suppliers, government agencies, shippers, etc. She learned from every problem she fixed;  she was on her way to being more than a credit manager; she was becoming the corporate troubleshooter and she loved it. She was the right guy for the job.

No resumes
Go to the classified section of your local newspaper and look for ads for A/R managers and credit managers. Most often in most companies the A/R and credit manager work in and report to accounting. They run the ads.

“Needed: someone with an accounting degree or with experience in credit and A/R management. Must have experience with our software program. Submit a resume, no phone calls.”

Credit is not a resume kind of a job. It’s a communications job. Sure, it’s important to know if a perspective employee went postal at their last job, but first find out if they are communicators. Have people call for a 10 minute phone interview; determine if they can talk, listen and make sense.

Look for people who like people and are liked in return. And then get the resume and check them out.

Know your needs
In the last 10 years I’ve presented my profit program to more than 300 CEOs and top managers groups in the U.S. and Canada. I’ve spoken at many association meetings and conferences, and I’ve done many in-house programs. At the close of each presentation I ask the same question, “What have you learned and how will you use it?”

It’s rare when one or several people don’t say that what they’ve learned is that they have the wrong person for the job.

Credit is extended in order to get profitable sales that would otherwise be lost. Credit is not an accounting function. Past due A/R management is all about keeping customers current and buying; its about identifying and controlling the small percent of accounts that represent a potential for loss. Past due A/R management is not an accounting function.

Abe WalkingBear Sanchez is an International speaker/trainer on the subject of cash flow/sales enhancement and business  knowledge organization and use. Copyright 2002 A/R Management Group Inc. www.armg-usa.com  All Rights Reserved.

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