Why It is Important to Properly Staff Your Credit Department

October 12th, 2021 by admin

A group of diverse workers lined up along a row of crescent-shaped desks, representing a credit department

When it comes to credit department staffing two things are important

  1. 1. Use Technology, Analytics, and Business Processes to Minimize Staffing

  2. 2. Never Understaff Your Credit Department

As a credit executive, the goal with staffing is to achieve a balance that both minimizes staffing and turnover but also allows your credit department to provide a valuable service to your customers. This efficiency is most often achieved through continued analysis of customer feedback, company financials, and attentive managing.

A few quick reasons to never understaff.

  1. 1. Disorganization and Confusion

    Each customer has a unique personality and circumstance and understanding this is vital to maintaining a good relationship. Trying to maintain too many of these relationships can be challenging for even the best credit professional. This means each customer will get less time and a worse experience. In the worst case, this can lead to mistakes and lost payments but will always lead to confusion and annoyed customers.

  2. 2. Increase in the DSO

    We have seen data that suggests credit departments that see themselves as adequately had a 5- 10% lower DSO than those who did not. While there are clearly other factors that could affect this, we believe that a properly staffed credit department is vital to maintaining a low DSO. We believe this for two reasons. One, the more personal attention a customer gets, the more they will prioritize your payment over others. Second, a properly staffed credit department can better avoid clerical and organizational mistakes that delay payment.

As always there is no one size fits all policy and staffing needs can only be assessed on a case-by- case basis, but understanding this balance is key. A properly staffed credit department is an investment; it requires money, time, and effort. Yet, the cost of experience and knowledge will always pay dividends later, even if it is not readily apparent at first.

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