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| Credit Control Specialist |
Credit Control Specialist |
Who is Credit Control Specialist: How they Work? & is there career right for you!
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| Who is Credit Control Specialist |
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Maintaining Cash flow is very
important in Credit Control. In this regard, each company should consider whether it
is doing everything on a track that its customers are paying on time. This is a set
of business processes to manage from sales order right through to customer
payment.
For many
entry-level jobs, you won't need a specific or formal qualification and
knowledge.
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| Logical Mindset And Affinity |
Credit Control is not glamorous position to work in, but they can offer great rewards and are an excellent fit for those looking to use their financial knowledge and problem-solving skills.
This is a critical
position that directly contributes to a company's
liquidity and. It also means you'll be helping to create accounts and the financial side of any operation runs smoothly and also create strong customer
relationships.
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| Commercial Finance |
The term receivables are defined as' Debt owed to the firm by customers arising from the sale of goods or services in the ordinary course of business.
Delinquency Cost arises out of the failure of the customers to meet their obligation when payment on credit sales becomes due after the expiry of the credit period. The cost associated with steps that have to be initiated to collect the overdue, such as, Telephonic & Email reminders and other collection efforts, Legal charges, where necessary, and so on.
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| Receivable Management is also called trade Credit Management. |
Delinquency Cost arises out of the failure of the customers to meet their obligation when payment on credit sales becomes due after the expiry of the credit period. The cost associated with steps that have to be initiated to collect the overdue, such as, Telephonic & Email reminders and other collection efforts, Legal charges, where necessary, and so on.
Benefits of Credit Control in Business!
Apart from the costs, another factor that has a bearing on Credit Control Or Accounts Receivable Management is the benefit from Credit Sales. Credit Control or Account Receivable is considered as a marketing tool to promote sales and thereby profits. The benefits are increased sales and anticipated profits because of a more liberal policy. When firms extend trade credit, that is, invest in Credit Control, they intend to increase the Sales.
Credit Control: The impact of a liberal Trade Credit Policy is likely to take two forms. First, it is oriented to sales expansion. In other words, a firm may grant trade credit either to increase sales to Existing Customers or Attract New Customers. Secondly, the firm may extend credit to protect its current sales against the emerging competition. Here, the motive is Sales-Retention. As a result of increased sales, the profits of the firm will increase.
Credit Control: The impact of a liberal Trade Credit Policy is likely to take two forms. First, it is oriented to sales expansion. In other words, a firm may grant trade credit either to increase sales to Existing Customers or Attract New Customers. Secondly, the firm may extend credit to protect its current sales against the emerging competition. Here, the motive is Sales-Retention. As a result of increased sales, the profits of the firm will increase.
Therefore, Credit Control or Receivable Management should aim at a trade-off between Profit ( Benefit ) and Risk ( Costs ). The benefits are increased sales and anticipated increased profits / incremental contributions. The major costs are Collection costs, Capital costs, Delinquency costs, and Default costs. The firm should consider only the incremental benefits and costs that result from a change in the receivables or Trade Credit Policy.
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| Accounts Receivable Management |
After the credit standards have been established and the Credit worthiness of the customers has been assessed, the management of a firm must determine the terms and conditions on which trade credit will be made available.
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| Credit Terms |
Credit Control: A cash discount is an incentive for customers to make early payment of the sum due. Cash discount has implications for the Sales Volume, Average Collection Period, or DSO (Days Sales Outstanding) / Investment in Receivables, Bad Debt Expenses and Profit per unit.
The discount would have a negative effect on profits. This is because the decrease in prices would affect the profit margin per unit of sale.
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| IMPLICATION OF CASH DISCOUNT |
The discount would have a negative effect on profits. This is because the decrease in prices would affect the profit margin per unit of sale.
Collection Efforts: -
The second aspect of collection policies relates to the steps that should be taken to collect overdue form the customers. A well-established collection policy should have clear - cut guidelines as to the sequence of collection efforts. After the credit, the period is over and payment remains due, the firm should initiate measures to collect them. The effort should in the beginning be polite, but, with the passage of time, it should gradually become strict.
The Credit Controller should take recourse to very stringent measures, like legal action, only after all other avenues have been fully exhausted. They not only involve a cost but also affect the relationship with the customers. But does that mean you are powerless? Of course not! The aim should be to collect as early as possible; genuine difficulties of the customers should be given due consideration.
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| COLLECTION EFFORTS |
The Credit Controller should take recourse to very stringent measures, like legal action, only after all other avenues have been fully exhausted. They not only involve a cost but also affect the relationship with the customers. But does that mean you are powerless? Of course not! The aim should be to collect as early as possible; genuine difficulties of the customers should be given due consideration.
The Credit Controller has to make Three Crucial decisions to build strong Pillars for Business.
(i) Credit policies,
(ii) Credit terms,
(iii) Collection policies.
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| HOW MUCH YOUR CUSTOMER REQUIRED CREDIT? |
The two broad dimensions of credit policy decisions of a firm are credit standards and credit analysis.
Credit standards represent the basic criterion for the extension of credit to customers. These can be either tight/restrictive or liberal / non-restrictive. The trade-off with reference to credit standards covers: (i) collection cost, (ii) cost of investment in debtors, (iii) bad debts, and (iv) level of sales profit/contribution.
The cash discount period is the duration of the period during which the discount can be availed.
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What does a credit controller do? |
A Credit Controller manages customer accounts, ensuring that new customers have healthy credit and that existing customers have settled monthly accounts in a timely manner. You will be asking people to pay their debts so it is important that you can exercise tact and discretion when required.
The tasks you will carry out and the skills you need for your daily work include the following:
v Making contact with people whose payment is overdue and explaining their terms of credit - this requires good spoken and written skills.
v Renegotiating repayment plans with people - you'll need to have an assertive but tactful manner with good negotiation skills. (Excellent communication skills, Good Negotiation Skill, Good Analytical skills, Maintaining contact with clients to ensure invoices are clear for payment )
v Using databases to check credit records and set up new entries - administrative and computer skills (Knowledge about Excel & spreadsheet & Experience with the ERP, Tally & SAP system ..)
v Posting and allocating daily Receipts (Cash, Check, RTGs) to accounting systems - an organized, methodical approach, and good numeracy.
v Visiting debtors to collect payments and tracing missing debtors - the ability to stay calm under pressure. (Ability to establish and maintain good client relationships, both internally and externally at all levels )
v Starting legal proceedings if debts are not paid and arranging for the repossession of goods to recover unpaid debts - the ability to work to strict deadlines. (Calm, confident manner to handle potentially uncomfortable conversations )
v Time Management; The ability to prioritize a heavy workload
v Ability to reconcile complex accounts and have excellent attention to detail
v Using databases to check credit records and set up new entries - administrative and computer skills (Knowledge about Excel & spreadsheet & Experience with the ERP, Tally & SAP system ..)
v Posting and allocating daily Receipts (Cash, Check, RTGs) to accounting systems - an organized, methodical approach, and good numeracy.
v Visiting debtors to collect payments and tracing missing debtors - the ability to stay calm under pressure. (Ability to establish and maintain good client relationships, both internally and externally at all levels )
v Starting legal proceedings if debts are not paid and arranging for the repossession of goods to recover unpaid debts - the ability to work to strict deadlines. (Calm, confident manner to handle potentially uncomfortable conversations )
v Time Management; The ability to prioritize a heavy workload
v Ability to reconcile complex accounts and have excellent attention to detail
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| WHY WE HIRE CREDIT CONTROLLER? |
Credit controllers are heavily involved in customer interaction, so they need excellent communication skills, good levels of diplomacy, and the ability to inspire customer loyalty and satisfaction. For this, you need to be a good communicator with a calm but assertive manner. They work within a wider finance and accounting team and usually report to the Credit Control Manager, Finance Manager, or the CFO / Head of the Department. Often reporting into a company account head, the credit controller will handle the collection of finances and the resolution of account queries, raising sales invoices and issuing credit notes.
It is vital that a Credit Controller builds and maintains close links with all customers, to ensure the smooth running of accounts and encourage the timely recovery of payments.
While past employment in credit control can mark you out as a strong candidate for a role, employers will also want to see positive character traits. They might include a focused attitude, willingness to learn, and good communication skills, so don't worry if you don't have previous employment in this industry.
Wherever you work,
However, the tasks and skills required are similar.'
How do I achieve it?
Begin at a junior or executive credit control position, there is plenty of opportunities to progress in the credit-control industry, such as promotions to roles with more responsibility like Assistant Credit Control Manager, Credit Control / Account Receivable & Commercial Head. Progression often comes after putting in hard work and getting proven results. In Credit Control it's all about getting difficult clients to pay outstanding accounts, or clearing a significant amount of debt.
You can think of a Credit Control role as a mix of customer service and finance. If a career in Credit Control sounds like a good match for your skills & you very open for traveling, can relate politely but firmly to people, are good with figures and able to work under pressure; then the next step is to apply. In your application, it's important to make it clear why you would be a good fit for the role and what you can bring to the position. A Credit Control position requires someone who can keep calm whilst dealing with difficult clients, as a bunch of well as having excellent communication skills. It's also a positive if you are comfortable working towards targets or Key Performance Indicators (KPI). For those with a focused mindset and talent for finances or numbers, a career in Credit Control can be both rewarding and satisfying.
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| Have you Interested in Credit Controller Job Profile? |
You can think of a Credit Control role as a mix of customer service and finance. If a career in Credit Control sounds like a good match for your skills & you very open for traveling, can relate politely but firmly to people, are good with figures and able to work under pressure; then the next step is to apply. In your application, it's important to make it clear why you would be a good fit for the role and what you can bring to the position. A Credit Control position requires someone who can keep calm whilst dealing with difficult clients, as a bunch of well as having excellent communication skills. It's also a positive if you are comfortable working towards targets or Key Performance Indicators (KPI). For those with a focused mindset and talent for finances or numbers, a career in Credit Control can be both rewarding and satisfying.
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| THANK YOU! |
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