Credit Matters Blog

When Did You Last Work ON Your Credit and Accounts Receivable?

Kim Radok 13 April 2012


Professional business advisors are constantly advising that  business owners and managers should work ON and not just IN their business.

Effectively, these advisors are saying;

"... occasionally you have to stop working on the day to day issues to review the way you are currently running and operating your business."

We often see this message of business  process review accepted for sales, marketing, warehouse operations etc. For some reason however, when it comes to credit and accounts receivable operations, these reviews are rare. If any review is completed, it is usually as an afterthought and or in isolation to the other business operations. Therefore there is little thought on the effect of any changes to other operations or vice-a-versa.

Rarely do you see a specialist credit or accounts receivable advisor employed to review the credit or accounts receivable operations. In other operations of the business, specialists from that profession complete any reviews, for example a payroll expert will review your payroll system.

In the case of credit and accounts receivables however, the reviewer is generally a professional from another business discipline. For example I have seen production line professionals or process change professionals who have never worked in credit or accounts receivable, called in to oversee a review of these operations.

This may appear to be a good strategy at first as these professionals can review the process with an unbiased eye. They also inevitably bring a straight-line approach to the problem as they seek the most 'efficient' operating system.

The problem is however, as we who work in credit or accounts receivable areas know, nothing is simple or operates in a linear manner when dealing with people and   money scenarios. The nuances or the "little things" which are required to motivate your customers to pay as quickly as possible, are often lost on those who have never dealt with people and money on a day to day basis.


I suspect the reasons specialist credit and accounts receivable professionals are not used, are based on the following observations.

"All you do is stop sales people doing their work and selling".

The derogatory retort - "You are nothing but debt collectors"

The equally sad lament "You ring for money - oh what an awful job. I wouldn't want to do that!"

The naive or biased management comment on the worth of credit and accounts receivable operations "Credit and accounts receivable departments are just cost centres that DO NOT add any additional value to the business."

With comments and generalist business thinking of this sort,  we understand why credit and accounts receivable processes are always treated with less respect than other functions in the business. Therefore until these types of issues are addressed,  any changes to credit and accounts receivable operations initiated by professionals from other business disciplines  will never produce best practice results

If your business continues to only work the credit and accounts receivable process as in the past, you may well continue to be PAID TOMORROW RATHER THAN TODAY. In the fragile business world of today, tomorrow may be too late.

May you be paid today rather than tomorrow.

Kim Radok