Keeping Credit and Sales on the Same Team

Credit and sales enjoy a symbiotic relationship. The success of each depends on the other one doing its job well. The sales department relies on credit to help expand sales and improve profitability, and the credit department depends on strong sales that it can collect. By partnering together, the two departments help fortify an organization’s success.

"All the sales in the world will not help businesses' bottom line, if sales are of poor quality and a large percentage of customers end up not paying their accounts," said Kevin Stinner, CCE, CCRA, who serves as an area credit manager with Crop Production Services and secretary of the NACM Gateway Advisory Board and member of its education committee. "However, if credit terms are too tight, new business will be restricted, and the business will not expand its profitability. Credit and sales is a balancing act."

Finding ways to strengthen the bond ensures that the relationship stays on track. NACM offers a number of tools to help accomplish that task. For example, members of the association’s 2015 Graduate School of Credit & Financial Management (GSCFM), held at Dartmouth College in New Hampshire, developed several best practices through their class project, The Dynamic Duo: Credit and Sales—A Look at Relationship Best Practices, which promotes working as a team. The credit professionals who developed the white paper formed a list of questions for each department to ask, answer and rate as part of an annual evaluation process to maintain the partnership, which depends on the support of an organization’s senior management.

Some of the questions include the following:
  • Is there mutual respect between functions?
  • Do credit personnel understand or are they knowledgeable about sales' objectives/goals? If not, why?
  • How would credit and sales personnel rate the mindfulness of themselves and each other?

The process then challenges participants to prepare a written analysis of their findings. “This demonstrates that relationship building is being taken seriously, and some of the responses may be surprising,” the white paper states.

In addition, an upcoming webinar presented by Stinner will look at the issue. Creating an Advantageous Partnership for Both Credit and Sales, held Monday, March 7, from 3-4 p.m., will explore the importance of collaboration between the two departments, ways to develop and strengthen bonds and how to maintain a good working relationship.

"Both sales and credit have the same ultimate goal—increase profitability of the business," Stinner said. "Sales by increasing sales, and credit by protecting a business’s receivables. By the two working together, the two stand a better opportunity at achieving each other’s goals, and thus gaining the advantage over other competitors that don’t have a good relationship between sales and credit."

Stinner also will present How to Make a Successful Credit Decision Based on Limited Credit Information in Las Vegas at NACM’s 120th Annual Credit Congress in June.

- Diana Mota, NACM associate editor

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