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In Focus Commercial Credit

Credit management: change is our business

In a fast-paced environment, the credit manager must find a way to work with sales and finance towards a common objective

Richard Prein Credit manager, Heras Fencing & Security

Since the start of the recession in 2008, the credit manager’s role has changed significantly. Business information, data, and reports are rapidly out of date in a fast-paced and changing environment. Consequently, credit managers have become more conservative, and the use of collateral against credit has increased: we have become bankers. Furthermore, the acquisition of up-to-date

information regarding the customer’s financial and business position has become key to making the right decision in the process of allocating credit limits. Other than the development of alternative

information providers, such as specialised news feeds, one of the main providers of this information, within the company, is the sales department. With sometimes conflicting interests and

influence levels that vary from one company to another, and where the position of credit management can be unclearly defined, the credit manager’s challenge is to develop a relationship that brings both sales and finance to work in the same direction with common objectives. The diplomatic skills of the credit manager become important, including the use of assertiveness where required. The current economic growth in Europe,

even slow, is a period where credit managers will need to be particularly wary. In the construction sector, where I am presently working, the banks have been holding together large construction companies that

October 2015

have produced continuous losses over the past years. With healthier players now in the market, the banks are starting to let these ‘bad apples’ go; there have been strong signals that this is taking place over the last few months. Net-worth indicators and dependency of

external financing have become essential in evaluating the customer’s position and to take the appropriate measures to mitigate your risks. The credit manager’s role is different from

one industry to another and is continuously evolving. At this time, more than any other, it is essential to be well informed about the health of your customers and your own company. You always learn and need to enhance change rapidly, which always makes for an interesting job! CCR 19

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