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Effective communication will make your job easier.

Frequent and effective communication with customers, subordinates, sales, and supervisors is essential to your success as a credit manager. Following are tips on improving your communication skills with each of these groups.

Communicating with Customers

The most common problem credit managers face involves past-due counts. Call delinquent accounts as soon as possible, but don't simply resolve the immediate problem. Instead, get a commitment from the customer for more prompt payment next time.

If your company generates invoices with pricing errors, the credit manager must be willing to get involved and resolve the problem. Trouble-shooting in someone else's back yard may be uncomfortable, but if you aren't willing to invest the time and effort to solve a problem, who will? Also, don't ignore customers who pay bills on time; remember to thank them for paying promptly.

Communicating with Subordinates

When communications break down between a manager and staff, the result is a drop in the quality and quantity of work, higher absenteeism, and employee turnover.

When communicating with staff, remember to explain your actions, decisions, plans, and expectations; ask for opinions; build self-esteem by sharing credit when things go well; criticize sparingly and in private, but don't reserve private meetings solely for criticism; give positive reinforcement and offer compliments when-warranted.

More open and frequent communication will build bridges between you and your subordinates, resulting in a happier and more productive work environment. Always remember that people beneath you on the organizational chart must never be treated as though they are beneath your respect.

Communicating with Salespeople

It is imperative to communicate frequently with your sales force to keep them fully informed about decisions affecting their customers. Be sure to put as much effort into delivering the good news to your salespeople as you put into delivering the bad.

Credit managers should regularly solicit ideas, requests, and recommendations from the sales force. For example, before your busy selling season begins, send each sales representative a list of his or her customers and their present credit limits. Ask them to indicate which customers will need larger credit limits, and how large the credit limit needs to be. Even if you cannot grant customers as large a credit line as the sales department requested, you will have established a dialogue and made the sales department part of the decision-making process.

To determine if the lines of communication between the credit and sales departments are truly open, ask yourself the following questions: Are salespeople candid with you and you with them? Do your salespeople provide you with reliable information? Do you encourage them to tell you informally when they think there may be a problem with an account? If and when they do, do you react or overreact to the news? Do you believe you really understand their problems, goals, and objectives? Do they understand yours? Do you ask the sales department for ideas or suggestions on compromises?

If the answer to each of these questions is "yes," congratulations. If not, there is room for improvement. Your goal is to create an environment of partnership and cooperation between sales and credit.

Communicating with Supervisors

Never present a problem to your manager without having one or more solutions in mind. Don't simply list the alternatives, recommend one.

Build trust by following through on the commitments you make to your boss and always share good and bad news quickly. Also, remember that the office is not a democracy. When your supervisor asks you to do something, give the task a high priority.

Frequent and effective communication helps credit managers become better informed and can prevent embarrassing oversights and errors. Communication builds trust. Frequent communication with these groups will give you additional perspective, help you find more creative ways to solve problems, and enable you to learn more about how your company works and the competitive environment in which it operates.

Michael C. Dennis, M.B.A., is a frequent contributor to Business Credit.
COPYRIGHT 1995 National Association of Credit Management
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1995 Gale, Cengage Learning. All rights reserved.

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Author:Dennis, Michael C.
Publication:Business Credit
Date:Jun 1, 1995
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