CCR2 Commercial Credit Management


Steer the right course using credit dashboards


The right technology can help you to properly monitor, and so optimise, your team’s performance


Scott R. Tillesen Former vice president of credit – The Americas, Tech Data Corporation srtillesen@gmail.com


In today’s business world, it is critical that credit professionals be productive and fast. Productivity is needed to assure that a company’s cost structure is competitive to produce the best possible profit-and-loss statement results. Faster decision response time is needed to


match the faster communication between buyers and sellers as the result of online ordering, and mobile devices. Faster response time is also a competitive differentiator.


Tools for the job Executive management cannot dictate faster response time or productivity. Credit staff and managers need new tools to accomplish this. Credit dashboards can provide a solution. Information needed to manage credit can


be accessed in one of two ways. It can either be pulled – meaning that you need to go find, retrieve, and format the information when it is needed – or it is pushed. Pushed information is provided to you without asking and in a usable format. For example, an alert that an insurance rating has dropped is a form of ‘pushed’ information. Pushed is definitely faster than pulled.


Aggregation Information is found in a variety of places, such as on websites, in computer files, and in paper files. A better way to manage data is to have it aggregated into one place. The combination of moving toward pushed


and aggregated information accessed through a dashboard is clearly the best approach to obtain both productivity and speed. A dashboard is a screen found in a single computer application that conveniently aggregates pushed information. There are two primary types of dashboards


that credit professionals should consider. One is a dashboard to manage the credit department overall and the other is a dashboard to manage customer accounts. Credit management is more art than


science and every credit department has found an approach that is acceptable to their company. Having said that, the content of each


dashboard will likely not be completely standardised between companies. So here are some content ideas. For the credit team overall, information


should be included to help understand both the department’s condition and portfolio performance, as well as staff performance. The department’s condition section could


include lists of accounts by descending total accounts-receivable amount or past due, balances of assigned risk class or credit score, and a 13-month history. Performance data would include activity


reporting over periods of time, such as your average pay days, collection agency performance, bad debt write-offs, cash discounts allowed, and insurance expense.


April 2017 www.CCRMagazine.co.uk Do not overlook your staff performance.


Information to consider would be operating cost as a percentage of revenue, number of accounts, and amount of accounts receivable per employee, as well as the number and amount of deduction items per employee. A customer-account dashboard should


include basic account-contact information, important dates (origination, last review, next review), accounts-receivable data, security information, financial statements, associated accounts, credit-department notes, document archive, external information (trade-group reports), and automated notifications, both internal and externally sourced.


Active involvement The creation of dashboards will require the help of IT professionals who know how to build or modify purchased database tools to support a dashboard. However, the active involvement of the credit management team is essential in promoting the value of these tools and guiding project direction. In the end, these are important to improving the productivity, speed, and performance of the credit department. CCR2


There are two primary types of dashboards that credit professionals should consider. One is a dashboard to manage the credit department overall and the other is a dashboard to manage customer accounts


31


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52