Cross-training and cross-reporting seems to be an increasing trend in some industries. The more frequent the interaction, in the opinion of Sammi McClanahan, customer finance manager at First Aviation Services, Inc./API, the more likely a strong working relationship will develop. “We hold weekly calls with our sales managers to review the status of all past-due accounts more than $2,000.00,” McClanahan says. “It takes about an hour for the review, but this also helps sales so they are always in the know regarding potential credit holds that would disrupt their sales, and any disputes get addressed immediately.”
Harold Epps, in marketing and sales of financial services at the CIT Group, also noted that helping sales personnel understand the credit role strengthens their ability to make money. “The most effective salesperson is the one who understands credit and the underwriting process, leading to better and faster prequalification of potential prospects,” he says. “Operationally, credit preserves the capital from risk, and sales pays your salaries. It is in everyone’s interest to better understand the other’s world, leading to more efficient and effective operations.”
Sara Keefe Heltner, director of operations and credit at Trade Acceptance Group Ltd., gave the example of monitoring aging receivables: when credit professionals communicate problems in payment streams to salespeople, it could help them make better decisions about using their time to pursue the right type of future business opportunities, which helps the sales team’s forecasting accuracy. And what salesperson wouldn’t want a head’s-up that could prevent wasting time on a bad lead? “Knowledge and sharing information are powerful and crucial for risk management,” Heltner says. “In the case of credit risk, it could make or break a small business.”
It’s well worth noting that for cooperation to work in reducing risk, both sides have to buy into it. Nobody wants to be subjected to constant dictation. As Karpinski characterizes it, this is not a one-way street. “Credit needs to step into the shoes of a sales associate and get a feeling for what it’s like. I want our credit associates to realize that sales associates don’t receive a regular paycheck like we do. If they don’t sell and collect, they don’t get paid. They are the front line, day in and day out, representing our company. Our job is to support them to the best of our abilities in their effort to achieve these goals.”
Darrell Horton, CICP, credit and collections manager with SHFL Entertainment, notes that in his 20 years of credit experience, he’s seen much success when credit and sales worked side by side. Both are in a field where information is critical, yet each is likely to have pieces to which the other side isn’t privy.
“In most companies, the sales team has one of the closest relationships with the customer,” Horton says. “The more I share with the sales team on what I need, the easier it is for me to get information. Many times, they have insight into the character of a company, which is a very important aspect in granting credit. When the sales team works with you and trusts you’re trying to find a way to approve the sale and not turn it down, they will go out of their way to assist.” Further, Horton finds that in “involving the sales team and letting them know what warning signs to watch for, I find out about a potential or upcoming issue much sooner. Bottom line: when you train and educate the sales team, they will generally help watch out for you, and be much more understanding when the answer is ‘no.’”
