1. 10 Essentials for Credit Management
ICTF Symposium – Emerging Professionals
Madrid, May 23rd 2016

2. A brief introduction

3. Today’s session How important is credit management?
Where do you start with improving?
What are the best practices?
Ask yourself, why is credit management important to your organisation?

4. #1 Your customer remains a customer
Why does a customer become a debtor after a long journey of creating a relationship and value?

5. What is your credit management jargon?
Customer
Debtor
Something else

6. #2 Divide your customers into profiles
Get strategic about your collections activities
Determine the most effective approach per customer segment
Monitor and adjust
Chances are none of your customers are exactly alike. Take a step back and look at various group of customers with similar profiles you can segment them by.

7. Are you segmenting your customers for collections?
Yes No
Don’t know

8. #3 Determine appropriate actions
Letter? ? Phone?
Daily? Weekly? Monthly?
Find out what works best and make it better
Choosing what to do with a particular customer or situation is tricky. Do you know what action is most effective when a customer is typically a good payer but has let one payment slip? And what about when the customer is a notorious later payer? Find a balance of effectiveness and efficiency not only by media type but also by contents. Use data to analyse!

9. Are you analysing on a frequent basis which communication channels are most effective?
Yes, we analyse constantly
Yes, we analyse one or more times per year
No.
Don’t know.

10. #4 Provide a feasible plan
Your team is your key to success
Monitor results and offer a motivating working environment
Right targets, right tools, right people
Credit management is people work – towards your customers but it all starts with our own organisation.
Involve you team and use their knowledge. But don’t forget the rest of your organisation, more on that later!

11. Is your credit management job target-driven?
Yes No
Can’t say

12. #5 Consult as many sources as possible
Know your customers better than they know themselves
Predictability is king
Wouldn’t it be great if you could see changes in behaviour sooner or be able to pick up on serious issues within your customers ahead of time so you still have time to have a meaningful discussion with them about it?
External data is a great source but don’t forget about the value of your own data.

13. Do you use data sources to enrich your customer understanding?
Yes, external
Yes, internal
Yes, mix of external and internal
No.
Don’t know.

14. #6 Strict on the process, gentle on the person
Customers usually have a reason not to pay
Communicate and understand
…but stick to your plan!
When you’re managing large volumes of customers and invoices a good structure is essential to staying on the ball. Don’t forget your customers are people, if they’re not paying they have a reason not to do so. You need to find out.

15. #7 Keep in touch Make your customer feel like a customer
Communication is two-way
Its common practice in your sales organisation – understanding your customer’s goals, what’s keeping them busy, and ‘what’s keeping them up at night. Effective collections is about monitoring and staying in touch. We have seen lots of examples within OnGuard users where the relationship between the supplier and customer was so good that there was open communication about the business. They could stay ahead and reduce risk more than any credit report could ever tell them – and well before any credit report could do so!

16. Are you building relationships with your customers?
Yes, always.
Sometimes, only with key customers or those that require it.
No.

17. #8 Take advantage of complaints
Find out where your weaknesses lie
Remove any reasons for a customer not to pay on time
No business is perfect. Are you keeping tabs of the complaints you get from your customers?

18. Is dispute/query management an integrated part of your credit management process?
A. Yes, I manage it as part of my job
B. Yes, but it is handled by someone else
C. No.

19. #9 Promote credit management within your organisation
Make your value clear to your organisation
Connect & involve
Bring credit management to the boardroom
How many people in your org know the value of the work credit management is doing on a daily basis? Is there are realisation that improving on credit management puts money in the bank – the fuel for any organisation.
Credit management has lots of stakeholders. Not just the CFO, but your sales organisation, upper management, delviery organisaiton, production etc.

20. Are you aware of how credit management contributes to achieving your organisation’s goals?
Yes No
Not sure.

21. #10 Use reports for insight
Improvement starts with analysis
Not just today, but also historical trends
Right insights for the right person at the right time
Improving starts with measuring and analysing your results. Benchmark yourself internally and against your industry peers. Share successes and involve the stakeholders that should be involved because good credit management is in their interest.

22. Are you analysing your performance?
Yes, we use it to find areas of improvement
Yes, but only because we have to No
Not sure.

23. …the 10 essentials of credit management
#1 – Your customer remains your customer
#2 – Divide your customer into profiles
#3 – Determine appropriate actions
#4 – Provide a feasible plan
#5 – Consult as many sources as possible
#6 – Strict on the process, gentle on the person
#7 – Keep in touch
#8 – Take advantage of complaints
#9 – Promote credit management with your organisation
#10 – Use reports for insight
Find the balance:
Doing the rights things
&
Doing things right
Try new approaches
Focus on your customer
Keep striving for improvement
The right people
The right policies
The right tools

24. #1 Your customer remains a customer
Just to remind you…!

25. Thank you for your attention
Contact OnGuard to find out how we can support you in improving your credit management
OnGuard.com