The end of financial year is a time for credit professionals to reflect and plan.
Naturally we focus on figures and percentages which don't always show the full value and achievements of the credit department, especially those that aren't easily represented in financial reports.
Take some time to consider how other measures could be used to communicate the value delivered to the broader measures. Here are some thought starters:
How many sales the credit team made
When a bad debt is avoided you’re not just saving the value of that sale but also the sales it will take to recover that one bad debt.
Tally up some notable recoveries and equate this to the amount of sales that would have been required to counter the loss. Put simply, if you recovered $10,000 and your profit margin is 20%, $50,000 of additional sales would have been needed to counter this bad debt.
If you refer good quality customers to your sales team you should be able to determine the likely number of sales that would result by using the average number of leads required per sale (a common measure in most sales teams).
Don’t forget to point out that these are potentially the most profitable customers as they are low credit risk, don’t require on-boarding and won’t require chasing for payment in the future.
Often credit departments are best placed to identify delivery, product or other issues that delay payment and affect customer satisfaction. If your department plays a positive role in identifying, analysing, resolving and referring these issues make sure the business understands the value of this and that credit is not just the the department that turns sales into profits.
All too often we let the numbers do the talking but the qualitative aspects of our work won't talk for themselves.
Taking the time promote the value of the credit team will pay dividends when you next seek approval for a new project, training for your team or career development for yourself. You will also have done most of the preparation in order to apply for the credit team of the year.