Credit Managers
Credit managers handle various crucial affairs and contribute significantly in optimizing profits of the company. They also play significant role in reducing losses of a company. Considering their important roles, they need some skills in order to carry their responsibility. This paper intends to discuss skills, role and opportunities of credit managers along with discussing the importance of organizational culture in credit management.
1
Credit managers should possess problem solving skills. Credit managers face a variety of challenges and issues in their career and they can successfully tackle all these challenges if they have problem solving skills. Since they have to deal with various types of customers of different needs and temperament, they cannot afford to lack problem solving skills (Graham, 2000). Apart from problem solving skills, credit managers need technical skills in order to understand their clients and their requirements. Technical skills further help credit managers in analyzing customers’ financial statements (Badenhorst-Weiss et al., 2008).
Communication skill is another skill that matters in the area of credit management. Brilliant verbal and drafting skill is essentially required for credit managers because they have a responsibility to deal and analyze financials of customers (Dennis, 2014). Credit managers should be very creative and pleasant. Credit managers should also possess qualities of good team leaders. They must understand needs of their teammates and should be able to motivate their team members to perform better (Allen & Gilmore, 1993).
Credit manager should be very attentive and fast. A good credit manager is required to be very committed person in order to perform for the professional growth and also for achieving targets. He should possess excellent skills of documentation, computation and dealing with clients. He should be humble and co-operating. A good credit manager is the one who can complete his maximum responsibilities in minimum expenses (Logemann, 2012).
2
The area of credit management requires various skills in order to carry out numerous accountabilities. There are a number of personal, technical and professional skills required for an effective credit management. Credit managers are liable for entire credit sanctioning process. Credit managers play very significant role in implementation of credit policies, evaluation of creditworthiness of potential clients and credit evaluation of existing clients. It is not possible to perform in the area of credit management without having ample technical, personal and professional skills (Broderick, 2009).
Only a credit manager with exceptional personal, professional and technical skills can sustain in the area of credit management. The era of traditional practices in the area of credit management is gone and now highly skilled people are required in the area of credit management. Credit managers should be very efficient, humble, committed and should possess excellent communication skills (Bullivant, 2010). Team leading skill is very essential in order to motivate teammates to perform. Organizational skills are equally important for credit managers in order to comply with the requirements of their organizations and their tasks. Technical skills like SAP, ERP, MIS and excellent command over mathematics and computers are necessary for the effective credit management (Edwards, 2004).
3
Consolidation in business is continuing and creating major challenges for the organizations and credit managers. Implementation of latest technologies such as Enterprises Resource Planning system, and SAP impact the career of credit managers. Technology can be a big threat or major opportunity for the credit managers (VFCMS, 2012). The demand of skilled and trained credit managers is high because traditional functions of credit mangers are replaced with latest and efficient functions. Therefore, the opportunities of development is laying on acquisition and marketing of new skills. A person with good credit management skills can grow from credit executive or customer support finance executive to customer financial manager and even other higher positions (Wells, 2004).
Every company follow proper centralize or decentralize organizational structure and hierarchy. Credit manager also has opportunity to get promoted to the different levels of his department and obtain position of Associate General Manager, or General Manager or Vice President or may be Chief Financial Officer. However, top positions in any organization does not want person to be good only in credit management skills but also in leadership skills. Large organizations working at global level emphasize on retention and career development of credit manager who have good knowledge of international trades, mergers & acquisitions, Lien Laws, bankruptcy, global risk management, MIS and latest technologies. Credit executives with knowledge in all mentioned areas can grow up to senior management level (Jin & Du, 2014).
4
Organizational culture is reflection of organizational values & beliefs, vision and mission. Organizational culture guides employees and all stakeholders on how to behave in the organization and performed business functions. Therefore, organizational culture directly impacts the behavior of employees and how they work (Basu & Rolfes, 1995). The functioning of credit management is also get impacted by the organizational culture. For example, credit managers are responsible for granting credit to the customers. An ethical organization that have transparent processes will not allow its credit managers to grant credit to the customers in illegal manner or by considering monetary benefits (Greenbaum and Thakor, 2007).
The organizational culture is driven by its goals and purpose; hence, ethical organization will not force its credit managers to achieve their targets by adopting unethical ways. Organizational culture impacts the way credit manager will assess creditworthiness of the customers. Organizational culture impacts the overall functioning of the credit management, and make organization strong or vulnerable to the bad debts. Unethical organizations promote unethical credit practices which sometimes lead to the fall of organization. For example, Enron adopted bad financial practices which resulted in the Enron’s debacle (Bierman, 2008). Credit management is an important part of the organization, and effective and transparent functioning not help in building positive image of the organization but also in gaining long-term benefits(McNaughton, 1992).
References
Allen, W.R., & Gilmore, H.L., 1993. What Managers Do. 4th ed. USA: AMACOM Div American Mgmt Assn.
Badenhorst-Weiss, H., Brevis, T., and Cant, M., 2008. Business Management: A Contemporary Approach. 1st ed. Cape Town, SA: Juta and Company Ltd.
Basu, S. N., & Rolfes, H.L. , 1995. Strategic Credit Management. USA: John Wiley & Sons.
Bierman, H., 2008. Accounting/finance lessons of Enron: a case study. 1st ed. Danvers, MA: World Scientific.
Broderick, E. J., 2009. Credit Management of the Future, USA: Smyyth LLC.
Bullivant, M. G., 2010. Credit Management. 6th ed. Burlington, VT: Gower Publishing, Ltd..
Dennis, M. C., 2014. The Responsibilities of a Credit Professional. [Online] Available at: http://www.coveringcredit.com/business_credit_articles/Credit_Management/art598.shtml[Accessed 25 October 2014].
Edwards, B., 2004. Credit Management Handbook. 5th ed. Burlington, VT: Gower Publishing, Ltd..
Graham, A., 2000. Framework for: Credit Risk Management. 1st ed. USA: Global Professional Publishing.
Greenbaum, S.I., and Thakor, A.V., 2007. Contemporary Financial Intermediation. 2nd ed. Burlington, MA: Academic Press.
Jin, M., & Du, Z., 2014. Management Innovation and Information Technology. Billerica, MA: WIT Press.
Logemann, J., 2012. The Development of Consumer Credit in Global Perspective: Business, Regulation and Culture. USA: Palgrave Macmillan.
McNaughton, D., 1992. Banking Institutions in Developing Markets: Building strong managememt and Responding to Change. 1st ed. Washington, DC: World Bank Publications.
VFCMS, 2012. Minimum Requirements for Credit Management (MRCM). 1 ed. USA: epubli.
Wells, R., 2004. Global Credit Management: An Executive Summary. Hoboken, NJ: John Wiley & Sons.
