Introduction
Credit Manager Job Description is one of the biggest question that everyone incorporate world is asking.
I’m sure you heard about the job even if you are far away from the finance team.
Generally, it’s considered the bad guy for the sales team and the ally for the finance department.
The more we know about this job, the more we know its field of intervention and how to deal with it.
- Blocking customer account is it in the credit manager job descritpion ?
- Providing instructions when signing a new contract with the customer is it in the credit manager job descritpion?
- Negotiating the terms & conditions about a new deal is it in the credit manager job description?
The credit manager job is one of the most important job in every company. We can say, he is in a pivot position that allows him to be in contact with everyone in the organization except the HR department.
The job requires you to have good communication and administrative skills, while being able to work as part of a team. The credit manager will also have to be able to adapt quickly in an environment that requires a high level of accountability while remaining impartial in all situations.
In this post, we will discover together the most important roles of a Credit Manager. So, welcome to our blog and let’s get started,
Credit Manager Job Description
Credit Manager Job: The Financial part
As you know, the credit manager has many hats. And you know what? the most important hat to wear is the financial one. Yes, sure but why?
We can say if the financial part of the credit manager job is missed, the company will face big difficulties to reduce different risks in accounts receivables part and to get at the end the cash from the customers on Time with a big T.
The order to cash process should be perfect so the company can manage all the risks from their existing or new customers and getting payments and on time.
Let’s explain more in order to understand how it works.
Let’s say we have a new customer called ” Michelle company” and they want to order from us 100K euros for a goods. The customer wants to have their account created, the order approved and the goods delivered. But the payment will be in 90 days.
Jack who is the credit manager will take in charge this order from A to Z in collaboration of course with the sales team, the billing department,…
Once Jack received the order from Sylvia (the sales specialist) he replied to her: “will send you by tomorrow a feedback about your order”.
In that time Jack our hero, will investigate about the customer ” Michelle Company” from both financial & legal sides. Why? Simply because he wants to know:
-Is “Michelle Company” a Solvent company with a big S
-Is there any legal action against “Michelle company” from other businesses in the market
-What is the customer company size?
-The financial numbers for the last 3 years of ” Michelle company”: turn over, results, working capital, fixed assets,…
-Is the customer company a part of a group
-The manager profil
-The order amount vs the company size and numbers
,…
Once Jack (The Credit Manager) has all these data, he can analyze the situation of “Michelle company” and then can decide if he accept the order, refuse it, reducing the order amount, asking for a payment in advance or a maximum warranty to secure the payment.
Credit Manager Job: The Sales part
The sales part is a specific hat to wear by the credit manager. Indeed, it’s not an easy thing to be rigorous in order to secure the payments by requiring (payments in advance, bank warranties,…) to the customer and in the same time mainting a good relationship with them and your sales team as well.
Generally, the credit manager is seen as the Bad Guy who block booking new deals with existing or new customers.
In the other hand, the credit manager is seen by the CFO, the finance department as a regulator who try to protect the assests of the company and secure effectively its payments from loss.
Also, it’s the job of the credit manager to schedule a regular meeting with sales teams, Bu’s and their managers in order to update the customers data base and their credit limits.
The best way to proceed is by making a meetings beginning of every quarter online or onsite and lefting those meeting by taking decisions:
- How can we reduce the debt of this customer?
- How we can increase the credit limit of this customer?
- How we can require bank warranties so we can unblock new deals?
It’s also a good strategy to make category for each customer:
- Low/Medium/High risk customer
- Green/Orange/Red customer
The credit manager has to make sure all these kind of informations are available for all the sales teams an specially their managers. They will know at the beginning of every quarter what are the challenges they will face in order to place new order. In other words, the sales teams will have 3 months to resolve with their customers disputes, payment issues, liquidity,…
Credit Manager Job: The Legal part
One of the credit manager job description tasks is to manage the legal issues with the customers.
And you know what? there 3 different parts on it. Let me explain.
The 1st part, we already discussed in the beginning of this post: Checking the legal or let’s say administrative official documents of the customer company.
Here we are talking generally about making to get the company registration document. Nowadays, you can get it online. If not, your sales teams should ask their customer to get this document with the order.
Yes, that’s great but why? Simply, to make sure this customer exists in reality in order to not deal with a fantome company. We heard about many cases where companies send goods and they never found after the deliveries their customers. They found at the end that were fake companies.
The 2nd part, is all about managing all the contracts with the customers. Those documents needs to be revised by specialist of law: Internal legal specialist or externally by a lawyer.
The credit manager has to be sure the company sign a contracts with its customers and securing its interests.
The 3rd part: Here we are talking about managing all the legal issues with the company lawyer in the court.
Your customer, don’t want to pay or simply disappeared then you will have to start a legal action by the company lawyer if the total amount not paid is not very small. You don’t want to spend big fees in the court and with your lawyer for a very small debt right?
The credit manager will have to maintain some regular meetings with the lawyer in order to update the status of every customer file in the court. A monthly meeting is more than enough plus a exceptional calls for emergencies.
Credit Manager: The Reporting part
Every Credit manager has to report to his management depending on his organization process.
Generally, the credit manager depends to the CFO but we can find some businesses where he is reporting to the CEO directly.
The Credit manager should consolidate all the data and kpi’s in a awesome and professionnal presentation so he can present the numbers to the CFO or as we said to the CEO.
20/80 pareto rule is always used in reportings. So, the credit manager will present and focus on top customers, top orders, top bad debt debts, legal cases status,,… and if the time allows him to go further in details, he will explain and give fore sure more details.
Wether he creates an awesome presentation in excel or by using power point, the most important thing is to presente data/kpi’s in a efficient way so the management can understand well the results.
We don’t have to forget the credit manager should report also to the business teams as we discussed. The credit manager job description contain also a meetings and reportings to the sales teams so they can support in getting the company cash and know the blocked accounts and the pending orders to be unblocked,…
Conclusion
As you can see from the above job description, it’s an important role in the company. You will be responsible for many tasks and decisions to be made. As such, it’s important to make sure you chose the right person for the job, as they might need a lot of help and also skills to take on the part of a credit manager.
In the end, the best credit manager will have a good knowledge of various legal aspects. The individual may have to deal with a number of people – lawyers and other employees or with customers having different needs, financial status and so on. That’s why he has to be knowledgeable in his field and able to handle all situations well.
Thanks for your attention, I am glad to tell you that if you want to work as Credit Manager than never hesitate, because it is very good Job profile on this site I hope this article help you to get job in credit manager. If you like this post, please share with your friend and keep visiting the Blog daily for new information.
Discover here another article about:
A Day In the Life of A Cash Collection Specialist
30 mistakes credit managers should avoid
9 Essential skills every cash collection speciliast should have
Credit Manager vs Cash Collection Manager: Keys of Difference
See you again soon.
Xiao
