Credit management today is as much about relationship-building as it is about managing receivables.
Gone are the days when the primary focus was asking, “Where’s the money?” Today, the question has become much more comprehensive: “How can we enhance the customer experience while ensuring timely payments?”
This shift in perspective is critical. Happy, satisfied customers are far more likely to pay on time, and nurturing those positive relationships leads to a smoother cash flow.
Watch the full BuildingBlocks webinar here: Building Your Village with Tracy Turner
This transformation requires more than just a shift in mindset—it demands the construction of a solid team, or “village,” capable of effectively supporting and implementing your processes.
Tracy L Turner, CCE, a seasoned credit professional with over 30 years of experience, shared these insights during a recent webinar hosted by Handle.com’s Lori J. Drake, CBA, for the BuildingBlocks community. Tracy stressed that by intentionally developing strong internal and external relationships, credit professionals can create an environment where communication is clear, tasks are executed efficiently, and both customer satisfaction and financial health are prioritized.
Let’s get into the practical strategies Tracy discussed for building your village and enhancing the effectiveness of the credit department.
Customers: Changing Perceptions and New Expectations
In the past, customers often preferred to stick with their sales contacts, avoiding the credit department whenever possible. Credit was sometimes seen as the “bad guys,” only there to chase payments.
The dynamics have shifted. As sales teams focus on acquiring new business, customers have become increasingly receptive to working directly with credit professionals–resulting in a greater awareness of how the credit team can offer assistance, not only with payments but also with maintaining their accounts in good standing.
Tracy shared that customers today are more in tune with their finances and what’s happening in the market. They know when things are up or down and are keenly aware of how much they can push their credit limits. Disputes over even small amounts are becoming more common because every cent counts. Customers want to ensure every penny is accounted for, whether going toward something specific or staying in their checking account.
This shift in customer behavior makes it essential to have all the necessary details at your disposal to maintain confidence and control.
Getting the Complete Picture: The Power of Information
To manage credit risk effectively, you need a comprehensive understanding of your customers and their financial behaviors. The foundation of this is intentionally gathering all relevant information from the start—leaving no stone unturned.
Building solid relationships internally within your company and externally with customers ensures you know exactly who to contact when issues arise. This knowledge is invaluable in speeding up processes and resolving problems quickly.
When onboarding a new customer, gathering all details from the credit application, including phone numbers, email addresses, and job-specific information, is crucial. Tracy advises extracting this information from job sheets and adding it to the account.
Being thorough in these early stages allows you to act swiftly and effectively when challenges arise. For instance, if a payment issue occurs, having the correct contact information at your fingertips–versus having to scramble and chase down who exactly is in charge of handling that specific issue–allows you to resolve it quickly, maintaining both the customer relationship and your company’s cash flow.
Building Your Village: Relationships Are the Foundation
A well-functioning credit department isn’t built in isolation—it thrives on strong, intentional relationships. These connections form the foundation of your “village,” enabling you to gather critical information, resolve issues efficiently, and support your company’s broader goals.
Working with Sales: A Partnership for Success
One of your village’s most crucial and often overlooked relationships is with the sales team. Sales and credit departments might have different day-to-day focuses, but their ultimate goal is the same: ensuring the company’s financial health through successful sales and secure payments. Building a strong partnership with the sales team is beneficial and essential for mutual success.
Understanding the Sales Team’s Perspective
Sales teams are on the front lines, interacting with customers daily. They can provide invaluable insights into customer behavior, potential risks, and opportunities for upselling. However, there is often a natural tension between sales and credit.
Salespeople are driven by the need to close deals and may sometimes view credit policies as roadblocks. On the other hand, credit professionals are tasked with mitigating risk and ensuring the company gets paid on time. If not managed well, this tension can lead to conflicts that hinder both teams from achieving their goals.
Tracy spoke about the importance of breaking down these barriers.
Proactive Collaboration: Offering Solutions, Not Obstacles
One of the most effective ways to build a strong relationship with sales is to proactively offer solutions that benefit both sides. For example, if a salesperson is pushing for credit approval on a deal that seems risky, instead of flatly denying it, consider proposing alternatives—such as a joint check agreement, requiring a down payment, or using a personal guarantee. By collaborating on solutions, you show that you’re not just there to say “no” but to find a way to say “yes” that aligns with the company’s risk tolerance.
Joint Customer Visits: Building a Unified Front
Joining salespeople on customer visits can be a game-changer. Tracy emphasized that these joint visits serve multiple purposes. “Not only do they build rapport with customers, but they also ensure that both credit and sales are aligned in their messaging and approach,” she explained. This unified front helps address potential issues before they escalate and fosters a collaborative environment where both teams feel supported and valued.
Learning from Sales: A Two-Way Street
Seeing salespeople in action also gives credit professionals a deeper understanding of sales teams’ challenges. For instance, during a ride-along, you might observe a salesperson juggling multiple calls, handling technical questions, and navigating tight deadlines—all while maintaining a positive demeanor with clients.
“Watching them work, I think, is beneficial too. If you can actually ride with them and watch them work, you learn a lot about the people you’re dealing with every day,” Tracy shared.
Building Trust and Mutual Respect
This collaborative approach goes beyond mere transactional interactions—it builds trust.
When salespeople see that the credit team is there to support them, they are more likely to involve credit early in the sales process, share critical information, and work together to structure deals that benefit everyone involved.
A solid relationship makes the sales team more open to learning about the importance of credit policies and how adhering to them can lead to more stable, long-term customer relationships.
Ultimately, credit professionals can transform potential friction points into opportunities for cooperation and mutual growth by investing time in understanding and supporting the sales team. The result is a more cohesive, efficient operation where sales and credit teams work together toward the company’s broader financial goals.
Leading the Team: Training, Empowerment, and Continuous Improvement
Leadership in credit management is not just about overseeing operations—it’s about empowering your team, encouraging continuous improvement, and creating a culture of collaboration and accountability. A strong leader understands that the credit department’s success hinges on the development and engagement of its team members.
Training: Building a Knowledgeable and Capable Team
Training is the cornerstone of a successful credit team. Without proper training, even the most experienced professionals could struggle to keep up with the latest industry practices, regulatory changes, and company policies.
Tracy emphasized the importance of ongoing education, stating, “You’ve got to train your team. It’s not just about hiring the right people; it’s about continuously investing in their development.”
Regular training sessions should cover both the fundamentals and the more advanced aspects of credit management–from understanding credit policies and procedures to mastering negotiation techniques and staying updated on legal and regulatory changes. Additionally, cross-training team members on different aspects of the credit process can enhance the team’s overall flexibility and resilience, ensuring that no single point of failure exists within the department.
Tracy also highlighted the value of learning from each other, saying, “I find that if you get everybody together, they can all bounce ideas off of each other.” This collaborative learning environment encourages team members to share their experiences and insights, strengthening the team.
Empowerment: Giving Your Team the Tools to Succeed
Empowerment goes hand in hand with training. It’s not enough to teach your team the skills they need; you also need to give them the authority and autonomy to apply them in their daily work. Empowered employees are more engaged, confident in their abilities, and willing to take initiative.
One way to empower your team is by cultivating a culture of trust and accountability. Encourage team members to take ownership of their accounts and make decisions within the framework of your credit policies.
Tracy pointed out the benefits of this approach: “When you empower your team to make decisions, you give them the confidence they need to handle their responsibilities effectively. They know they are trusted, motivating them to perform at their best.”
Another aspect of empowerment is providing the right tools and resources. This includes everything from access to up-to-date information systems and credit management software to ensuring that team members have support from other departments, such as legal and sales.
Continuous Improvement: Fostering a Culture of Growth
In a rapidly changing industry, continuous improvement is essential for staying competitive. This means regularly reviewing and refining your processes, encouraging innovation, and being open to new ideas. As a leader, you should create an environment where team members feel comfortable suggesting improvements and experimenting with new approaches.
Tracy emphasized the importance of regular feedback and performance reviews in fostering continuous improvement. “You need to have regular check-ins with your team to discuss what’s working and what’s not,” she advised. These sessions can be used to identify areas where additional training might be needed, as well as to celebrate successes and recognize individual achievements.
Encouraging a mindset of continuous learning and improvement benefits the team and positions the credit department as a forward-thinking, dynamic part of the organization. This approach can lead to more efficient processes, better risk management, and a stronger financial position for the company.
Networking: Expanding Your Village Beyond the Office
Building your village doesn’t stop within the confines of your company; it extends into the broader industry through effective networking.
Networking is critical to professional growth and success, particularly in credit management, where staying connected with peers, industry trends, and best practices is essential.
Leveraging Professional Organizations and Webinars
Tracy emphasized the importance of staying connected with industry peers through organizations like NACM (National Association of Credit Management), communities like BuildingBlocks, and platforms like LinkedIn.
“NACM, LinkedIn, Handle—these are invaluable resources that didn’t exist before. Now, they offer opportunities for continuous learning and connection with other credit professionals,” Tracy shared.
Participating in webinars, attending industry conferences, and being active in professional associations allow credit professionals to learn from others, share their own experiences, and stay updated on the latest developments in the field. These connections can lead to valuable partnerships, mentorship opportunities, and potential business deals.
Building Relationships with Industry Peers
Networking isn’t just about collecting business cards; it’s about building meaningful relationships that can support your professional journey. Tracy suggested that credit professionals should not only focus on building their internal team but also on cultivating relationships with peers from other companies. “By sharing experiences and challenges, you can gain new perspectives and solutions that you might not have considered on your own,” she noted.
Regularly engaging with your network through online platforms or in-person meetings can provide insights into how other companies handle similar challenges and what strategies have worked for them. This exchange of ideas can be a powerful tool for innovation and problem-solving within your credit department.
Networking for Personal and Professional Growth
Beyond the immediate benefits to your department, networking is crucial to your personal and professional growth. Expanding your network increases your visibility in the industry, opening doors for career advancement and new opportunities. It also helps you build a reputation as a well-connected, knowledgeable professional engaged with the industry and its developments.
When done with intention, networking contributes to the overall strength of your village, providing a support system that extends beyond your immediate team and department. This broader network becomes an additional resource you can draw upon to solve problems, find new opportunities, and keep your skills sharp.
The Benefits of a Well-Built Village: Improved Credit Operations
When your village is strong, your entire credit operation becomes more effective. Customers are handled more efficiently, leading to a better overall experience and an increased likelihood of timely payments. The sales team, in turn, develops trust in your credit team’s ability to manage difficult situations, allowing them to focus more on driving revenue.
By establishing solid relationships within your organization, corporate staff, and managers will know exactly who to approach to resolve credit-related issues. This boosts your credibility within the company and ensures that your team is recognized for its contributions to its success.
Working with intention and efficiency in credit management requires more than just technical know-how—it demands cultivating strong, collaborative relationships.
By building your village, you create a network of support that enhances your ability to manage credit risk, improve customer satisfaction, and contribute to your company’s financial health. This approach makes your job easier and sets the stage for long-term success in your career as a credit professional.
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