Staffing Your Credit Department
The petroleum company credit department is a critically important area that can be tough to staff correctly. It is a high customer touch area and affects desired company growth while also being tasked with risk management. To make things even more interesting, problems that originate in other departments often show up in the credit department’s accounts receivable aging, where staff is charged with extreme levels of problem solving.
I’m often asked what makes a good hire for the credit department. Generally speaking, a good hire is a mix of bulldog, sympathetic listener, solid communicator, negotiator, detective, people-person, analyst, researcher and also willing to work for a mid-level wage. Disorganized people pleasers need not apply. Sound like a tall order? Yes, it is!
Recruiting can admittedly be a challenge, but great success happens when you get the right person in the seat and set that person up with a gameplan of solid systems and processes. While hiring, keep your eye out for junior bankers in the community, or other applicants that strongly exhibit the personality types outlined above. An old saying is to hire for aptitude and attitude and train for specific skill, which is definitely applicable when hiring credit staff in today’s tight labor market.
Successful staffing can also come from promoting from within, especially current employees who already know the customer base and the company’s basic appetite for risk and growth. An employee who has already spent two years in customer service should have a shorter learning curve to success in the credit department.
To help with retention, credit departments that have regular, structured meetings with the CFO, sales and other related staff experience higher levels of ongoing success. Transparency on what’s happening with credit and collections, including a “no surprises” common goal, is helpful in keeping everyone on the same level of understanding. New hires can experience greater success if they are given several weeks of carefully focused training in addition to being assigned a mentor from their peer group in the company. Performance goals and metrics should include measurables totally within the control of the department.
Simply measuring the credit department by the percentage current on the accounts receivable aging doesn’t work very well if credit employees are not in control of credit approvals. A more meaningful measurement would be the metric of new applications processed, number of collection calls per week, or other customer touches which should show an impact on the aging.
Proper hiring and training of the credit department is the first important step to keeping staff engaged, energized and successfully attaining their stated department goals!