Do We Need to Staff Up?
A frequently asked question I hear when going onsite to help petroleum companies with their credit and collections strategies is, “do we have enough employees in the department?”
While helpful for internal benchmarking, I do not recommend a simple formula for staffing using invoices generated, the number of active customers or other similar criteria, because the level of activity required to manage those numbers can vary so much. For instance, do you have a high-maintenance book of customers because they have not been educated or trained on payment expectation? Has there been a company initiative for bringing both new and current customers to an automated electronic payment platform which greatly reduces collection activity? Do you have a dynamic company portal that allows quick and easy customer access to billing information, invoices and payment which can cut down on inbound calls to the credit department?
Getting back to the question, accurately answering the staffing issue requires a deeper look into what employees are spending their time doing, what duties are the highest and best use of their time, and what manual tasks can be eliminated or performed using technology. There is no question that credit department employees stay incredibly busy, but is there a way to address the increasing demands that does not involve immediately adding staff?
Credit staff should be actively managing their time allowing for pro-active credit management vs. reactive management. Tracking credit department activity can be eye opening and helpful in potentially offloading purely administrative tasks to other related departments and identifying time-consuming problems that need a root-cause fix.
For example, if the activity tracking project shows an extraordinary number of inbound calls being fielded by staff, there is an opportunity to work on correcting those highly interruptive calls. These calls often involve credit staff solving a problem that originated in another department, which could use a root-cause fix.
From my experience working with petroleum company credit departments, these are 5 common areas of opportunity to increase efficiency of credit staff:
- Track inbound call numbers, from internal inquiries to customer calls
- Check credit limits for customers frequently going on credit hold/release
- Make sure sales understands the standard timeframe for new account approvals
- Reassign purely administrative, clerical tasks
- Use technology to the fullest capacity for credit department efficiencies
This tracking project is a worthwhile endeavor especially for companies in high growth or acquisition mode and helps clarify and streamline the staffing and workflow of this critical department.
Ann Pitts
The Best Captains Are Not Made From Calm Seas
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