In Focus Risk
entities, franchise partners, distributors, and independent retailers who may have multiple outlet locations. Within credit, we have to take into
consideration the delivery windows together with debt exposure and risk analysis. As such, the relationship between credit and distribution is as important as that of sales and credit. Weekly meetings are a must to review ‘work in progress’ and items that are in transit from our manufacturing suppliers. Terms may vary between pre-payment,
part pre-payment/part credit, monthly payment plans, open credit, and credit with security, all fairly conventional methods. However, they are tailored with clients to
ensure a smooth partnership and so to assist business development. The stock strategy includes sending orders
uninterrupted, consolidated for bulk delivery or held subject to fulfilment of a condition, such as direct-debit mandates or settlement of an overdue debt. Discipline is controlled and administered by the credit team as part of the pick process, involving statuses ‘pass’, ‘work and hold’, and ‘reject’. Once completions dates for the season
have passed, most companies would start to discount, so as not to be left overstocked. The longer you hold fashion items, the less their residue value. This can be viewed, at store level, in displaying end of season sales and promotions on slow-moving lines.
For us, as a supplier, re-manufacturing of popular styles could be an issue, especially as the original production was done many months prior, and it is for this reason that our sales and production teams have to be on the same page
Stock-replenishment orders Many clients will look to see which items are selling well and then attempt to re-order more. If you have a payment plan for the forward order in place, this could leave a balance to be settled. On a positive note, a re-order does help
in negotiating settlement of invoices, due and overdue. For us, as a supplier, re-manufacturing of
popular styles could be an issue, especially as the original production was done many months prior, and it is for this reason that our sales and production teams have to be on the same page.
Conclusion What you will gauge from this is that credit within the industry is much more than just collecting payments. The tri-department partnership of credit, sales, and distribution is the key. We, the credit team, attend regular sales
meetings showing the new seasons ranges, discussing strategies and directions. While, with the distribution team, we hold weekly meetings looking at work in progress and upcoming deliveries. So, the question is: what do you do to
collect money? You must be the sales prevention department? Well I think not, we are the ears of the organisation, just as sales are the eyes. CCR
December 2017
www.CCRMagazine.co.uk
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