Strategic Credit Management Solutions to the rescue

Get the feeling we are all on the Titanic?

Everywhere businesses are losing sales and scaling back, cutting jobs and desperately trying to survive. This week’s Newsweek magazine excerpts Ben Sherwood’s book “The Survivors Club.” In it, Sherwood cites Dr. John Leach, a leading expert on survival psychology. He’s come up with a theory that categorizes “ways people respond to life-threatening situations.” It is a variation of my favorite 80 – 20 rule with a twist. Dr. Leach theorizes that 80 percent of us when faced with a crisis are “stunned and bewildered.” We do nothing different. We don’t change how we do things; we act as if nothing is the matter. Dr. Leach calls it the “incredulity response.”

I cannot speak for other areas of a business, but I’m willing to bet that in these desperate times, if Dr. Leach’s theory is true, most credit departments fall into this category. By and large, credit management is learned on the job. We’ve had better than a decade of fairly good economic trends, and as such credit departments have not had to face the challenges that face them today. Most credit managers were drafted into the position without any formal schooling and for the last twenty years at least the position has been downgraded to a nearly entry level position. Accounting clerks have been made credit managers, because they know what a balance due is.

In today’s reality, businesses cannot afford to conduct themselves as they have for the last ten years. We have a new reality. Sales people must be more creative than ever to find new sales. Credit people must adapt to this new reality and be just a creative in finding ways to extend credit and protect and collect the receivables. However, according to Dr. Leach, only 10 percent of a group will grab a leadership role and guide the rest to safety. Another 10 percent will panic and act in ways that are dangerous to the group.

That’s where Strategic Credit Management Solutions can help. With over thirty years experience, we’ve seen good times and bad times. Our specialty is fixing credit departments, making them more productive, introducing the tools and processes that will get the entire department on track.

Think of us as a life raft and call us today.

See our website at http://powerscredit.com/.

Your comments are welcome.