Billing and credit control have traditionally been seen as reactive roles. Billing reacts to a transaction and produces an invoice. The credit manager reacts to an overdue invoice by chasing it.
And yet, in my experience, the credit team are the people nearest to the customer. Not only do they talk to customers constantly, but they are also the people still having conversations long after the product or service has been delivered. Therefore, we should consider them as being much closer to a customer services function.
Before the angry emails flood in, I’m not talking about giving credit managers CSA badges and telling them to sit by the phone. Rather, I think that they have uniquely privileged access to customer sentiment. When you're talking to a customer about an unpaid invoice, you find out what your own business is doing right or wrong. In that sense, I think that credit professionals are a real conduit into the business for essential feedback.
One of my strategies in setting up a new credit operation for a computer manufacturer was to sit the order processing people next to the credit people, so that there was a perfect interface. When either team was talking to a customer, both knew what was going on. That meant three things:
- First, as I said above, it meant that we learned what customers liked or didn’t like about the company. That also meant we could iron out persistent problems rather than having them fester into a more entrenched culture of late payment.
- Second, it meant that customers couldn’t hide behind a story. If they said a product hadn’t been shipped, the credit controller could simply turn to the order processor and ask for the facts.
- But thirdly, the credit controller has an ear to the ground. They get the important stories from the customer’s side: maybe they have just got a giant order, which is why they’re turning on the taps. Or, on the other hand, perhaps half the sales team has just been laid off. For deciding on credit, this is real time intelligence that matters.
Every interaction with a customer is valuable. The beauty of the billing team is that they are at the end of the delivery chain. Nobody is better placed to see how a transaction has gone – and to take the temperature of the customer for the future.
Philip King has 42 years’ experience in credit management and related disciplines. He was Chief Executive of the Chartered Institute of Credit Management from 2005-2020. He also served as Interim Small Business Commissioner from 2020-2021, supporting small businesses in their trading relationships with large customers, particularly in relation to payments.