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The Credit Department of the Future

© Credit Services Corporation

Students and seminar attendees sometimes ask what I see as the major changes that will take place in the typical credit department of the near future. Unfortunately, I foresee a number of significant challenges [and not much good news] on the horizon for credit professionals. I believe that in the future credit departments will:

• Be centralized, rather than decentralized
• Have fewer total employees
• Involve some companies outsourcing the credit function as a "non core competency"
• Involve some companies folding the credit and collection department into customer service/customer support
• Be more fully automated
• Use sophisticated credit scoring software to identify problem accounts
• Use collection management software to prioritize and automate the collection process
• Involve the use of deduction management software
• Involve automated financial statement analysis
• Use artificial intelligence to screen orders pending in order to identify only those that truly need personal attention by the credit manager
• Further automate the automatic cash application process now being used by some companies
• Use video conferencing or webinars rather than requiring attendance at industry credit group meetings 

What does this mean for the average credit manager? I think credit professionals need to redouble their investment in their own professional development. Credit managers should stay current with technological changes, and embrace the changes that reduce cost and headcount and/or make the credit department more efficient and effective.