The Credit Professional, 2013

Well, it's been a few years since I posted here (I've been busy elsewhere, including posts on LinkedIn and other online media), but in the very strange event that someone reads this blog, I'd like to cover some recent history from a personal perspective.

People blog for any number of reasons, including - unfortunately - some which do not result in well-reasoned, easy to read articles.  So, here's why I think you should care about my perspective.  If you are at ll unsure about your career path, or how you will get to the place you want for yourself and your prospects, I think I can help.  If you see some people succeed while others fail, and you want to know why without falling into lame conspiracy theories or just hating people for success, I think I can help.  With that said, read on if you wish.

Most of the books and presentations you'll hear about these days come from people selling things.  You can be a millionaire, but first you have to buy the book, video and plan from the guy who may well have made his  fortune selling things like that to people before you.  I come from the Old School, with rules everyone OUGHT to know but somehow many forgot or never learned:

1.  Everything has a price
2.  You can't make something of value without doing the work needed to create it
3.  There are bad people, who are quite willing to steal from you if you don't stop them

That last part is where I come into the picture.  I'm a credit manager, which role is all too often disparaged by salesmen, because I represent prudence and caution, which qualities are deemed uncool in the mind of people chasing quick sales and high margins.  I'm not their enemy, though it can be difficult to explain why they should be happy with me.  The short answer is kind of like why you pay for a home security system - you may not like the cost, but it's there to prevent really bad things from happening to you.

My history in Credit started in, perhaps oddly, Operations.  I was a manager of a large movie cinema, and had about sixty employees under me at the largest of the locations I ran.  I learned that when you have a certain amount of turnover (common to the industry), you find that some of your employees will be outstanding, many will be good, but there will be some you regret hiring, and some will be out and out criminals. If you have money around or things of value, there are people who will try to steal from you.  This problem is not just about employee theft, or even theft as most people know it.  I had a number of customers who would buy tickets to one show, then sneak into another theater so they could see two or even three movies for paying once.  There were people who would eat food from concessions, then demand their money back for no better reason than they hoped to get free food.  At least some of your customers are crooks.  Worse, there are a number of customers who think they should get a better deal than what they agreed to, and this shows up across the board in commerce.  I witnessed attempts to cheat a bit on products, service, and especially payment not only in the Cinema industry, but also in Healthcare, Energy Distribution, and in Wholesale Distribution as well.  There are plenty of people who feel entitled to pay late, pay less than they owe, or to complain just so they get free things or a financial benefit.  It's a fact of life, and one you have to include in your plans for a business.

In my experience, somewhere around three percent of potential business customers will try to cheat you out of money for an order (I don't include valid complaints, but just the ones who deliberately withhold money they really do owe), and between twenty and twenty-five percent will pay you late (as in at least two weeks after the due date.  That second point is important, by the way.  A lot of Sales guys will say it's no big deal if a customer pays late, as long as they pay you eventually.  The obvious reply to that, should be to ask how happy the Sales guys would be if their paycheck was delayed by a few weeks.  Any business needs to know what to plan for in Cash Flow, and that means AR has to come in pretty much on time.

A Credit Manager exists to protect the company from loss or slow payment.  That makes us unpopular, but we are as vital as any other member of the company.

[ NEXT - what does a Credit Manager do to help grow a company? ]    


No comments:

Post a Comment