Getting in Shape for 2017: Year-end Tips for Credit Professionals

Getting in Shape for 2017: Year-end Tips for Credit Professionals

December is a hectic time both in and out of work.

For some, there are celebrations and vacation time to be had. But while others are chugging eggnog at a rotation of Christmas parties, the combination of a shorter month and year-end deadlines often create extra pressure for financial professionals.

With the festive season in full swing, December offers a critical opportunity. Use the year-end crunch to lay the groundwork for next year’s business success.

Your most stressful moments are also your greatest source of learning

Did December bring a credit and collections workload avalanche? If so, take note of the stressful moments. What caused them? And what can you do to prevent them happening again? Every problem presents an opportunity to make a change.

For instance, if your people struggled with their workload, consider opportunities to automate the most time-consuming, manual tasks, and implement more streamlined processes in the New Year.

Takeaway: Before you turn the page to January, make sure you allow time to evaluate whether your people, technology and processes are working well – or if they need to be improved going forward. For instance, spreading financials for a credit analysis is just one task of many that can be easily streamlined (contact us, to learn how). Optimize your tools, and streamline your low return tasks in 2017.

Use the right tools, for the right job, in the right way

December tests even the most seasoned credit professional. There’s greater sales pressure, more customers on credit hold, and an increase in requests to raise credit limits in order to ship goods. We need to make wise credit decisions 24/7 – and the right tools can help.

So, it’s important to ask yourself – are your human and technological resources up to the workload challenges you face? 

Takeaway:  There’s a reason for the saying, “Use the right tool, for the right job, in the right way”. The right tools always make a tough job easier – and January may be a good time to review your toolkit.

For instance, while every credit department has it’s own preferred credit limit calculation method, it usually involves reviewing trended financial statement trend data, and other timely inputs. Many of our subscribers use our trade credit limit calculator as a double check for their own “credit limit analysis” calculations, our database for ready access to quarterly financials, etc.

Take time to reflect on bankruptcy risk

Once the stress of December subsides, take time to reflect. If you experienced any unpleasant surprises during 2016, it may be time to revisit your credit decisioning process and update your tools to recognize the early signs of business failure. Consider revisiting your strategies and processes to uncover growing bankruptcy risk, and monitor growing financial distress in time to act.

Takeaway: Start the year by evaluating your company’s approach to monitoring customer financial health. Make sure your credit risk monitoring tools are up to the task, to be in a stronger position to make rapid-fire decisions next December.

For instance, a reliable, crowd-sourced financial risk score, credit risk monitoring service and other tools can help you stay ahead of public company financial risk in the new year. To learn more about how to tune-up your process: schedule a personalized risk assessment and demo.

Prepare for next December’s to-do list, now

Each year like clockwork, December rolls around. A year from now, when you're working overtime in a bid to meet 2017’s year-end pressures, will it be like the movie Ground Hog Day?  Will you face the same thing year-end pressures, all over again?

Tracy Rosenbach, Chairperson of the CMA offered this to-do list for credit professionals at the start of December:

  • Call customers to ensure large/crucial payments arrive on time.
  • Work with the sales team to finalize or confirm any new customer arrangements or existing customer deals that might impact the bottom line.
  • Speak with management to confirm what the year-end expectations are.
  • Send accounts that aren’t communicating anymore to a third-party collections agency for their assistance.

Your December to-do list may be even longer! So ….

Takeaway: As the saying goes, ‘You can do anything, but not everything’.  Organization and focus are your best bets for navigating next December’s workload.

In that spirit, our subscribers tell us that a more focused approach, using a simple tool that identifies dollars at risk, is a great help. Our Trade Contributor Program applies a risk lens to your accounts receivable. It generates reports based on your own trade files, ranking receivable dollars by risk, and much more.

What lessons will you takeaway from the year-end crunch?

The right processes – and tools -- can make all the difference with how we set priorities and meet year-end demands. While January is a time to look ahead, it’s also an opportunity for reflection.

Once the dust settles, and the tough year-end credit decisions are made, what lessons will you takeaway from the year-end crunch?

Learn how our enhanced credit analytics and related services can help you to protect your company’s A/R and get paid.  

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.