7 Ways to Create a Better Credit-Sales Partnership, and Improve Financial Results

A strong partnership between credit and sales management, working together, can drive sales growth

When we talk to clients about their credit challenges, inevitably the conversation turns to the relationship between credit and sales.

Some credit managers have an adversarial relationship with sales, others have a very supportive one. But no forward-thinking credit manager wants to be the “Director of Sales Prevention.” A healthy partnership can pay big dividends, driving profitable sales growth for your company.

In that spirit, we thought we’d summarize some of the tips we’ve heard over the years, to help sales and credit work more closely together to improve financial results.

7 Ways To Create A Strong Sales-Credit Partnership

Here are a few tips we’ve heard from our subscribers about building the sales-credit partnership, which may be helpful:

1. Take a road trip

You can only develop so much relationship sitting behind a desk -- get out into the field. When you ride along with a sales rep visiting customers, you’ll get a bird’s eye view of the customer’s operations and their capacity to pay you, and you’ll also come back with a new understanding of the challenges that the salesforce has, and vice versa.

2. Go to a sales meeting

After the business meeting, have lunch or dinner. Hang out over a drink. Play a round of golf. You’ll hear about the challenges that sales faces in selling the company's products or services, and develop a rapport that you’d never have otherwise. And, while the kind of partnership we’re describing doesn't happen in one three-day sales meeting, once you start building the relationship, communication and collaboration become easier.

3. Always be teaching

Sales people are rarely financial people, and many think that “household name” businesses never fail. Find teachable moments to show them the broader picture. Then, when it comes to that difficult deal, and you have to say, "Hey, we can't do this. It doesn't make financial sense” due to balance sheet problems, liquidity or whatever financial risk you discover, that same "No" isn't so difficult.

4. Talk to credit before the sale

If you are consulted before the sale, red flags can present an opportunity. Let your sales team know that you are willing to help them make the sale, by working together to devise a creative solution that protects your company interest. One customer puts it this way: “It's always been my style to explore every avenue that I can, to make a sale occur, and not say no.” If sales understands your willingness to go to bat for them, they will grow to trust you and understand your value.

5. Help them sell more

The credit manager’s job isn’t just risk mitigation, it's growth, too. In this regard, you can alert sales to new opportunities. Identify customers with strong financials, and increase the credit limit on these accounts, to help sales sell them even more. And, identify companies with improving financials, where you are willing to increase your exposure. It helps to have a reliable financial risk score, like the FRISK® score, to provide a fair and accurate assessment of improving financial strength, for credit line determination.

6. Meet new sales hires

Get on your company’s orientation schedule for new hires, to help them start off on the right foot. This tip came from Lee Tompkins from MPW Industrial Services: "When we have new salespeople come in, and they go through orientation, I start off with, "Hey, I'm the credit manager, and this is my team. We will be managing a portfolio of your customers. I need your help: you're the eyes and ears. You might learn things that will help me to make my team successful, and I can help you to grow that particular account ..."

7. Nobody likes bad news, but …

Occasionally you may have to justify an unpopular credit decision, due to a poor balance sheet, liquidity problems, thin margins, poor payment history, or more. Those are difficult conversations to have with salespeople. It helps to explain your reasons, and have the data to confirm your independent analysis, alert you to possible financial concerns, and back up what you're saying. Our subscribers sometimes use the FRISK® score and CreditRiskMonitor news updates for that purpose.

The sales-credit relationship doesn’t have to be adversarial. By being proactive and laying the right groundwork, you can get ahead of fresh concerns, work together to grow sales, and drive a more profitable bottom line.

Find out how our services can help you manage risk and support the credit decision-making process. DOWNLOAD THE OVERVIEW BROCHURE

About CreditRiskMonitor

CreditRiskMonitor is a financial news and analysis service designed to help professionals stay ahead of public company risk quickly, accurately and cost-effectively. More than 35% of the Fortune 1000, plus thousands more worldwide, rely on our commercial credit reporting and predictive risk analytics for assessing the financial stability of more than 56,000 global public companies.

At the core of CreditRiskMonitor’s service is its 96%-accurate FRISK® score, which is formulated to predict public company bankruptcy risk. One of four key components calculated in the FRISK® score is crowdsourced subscriber activity. This unique system tracks subscribers' patterns of research activity, capturing and aggregating the real-time concerns of what are essentially the key gatekeepers of corporate credit. Other features of CreditRiskMonitor’s service include timely news alerts, the Altman Z”-Score, agency ratings, financial ratios and trends. CreditRiskMonitor’s network of trade contributors provides more than $150 billion in trade data on their counterparties every month, giving them visibility into their biggest dollar risks.