What Do Credit Managers Do?

By Gahala, Charles | Business Credit, January 2005 | Go to article overview

What Do Credit Managers Do?


Gahala, Charles, Business Credit


Have you ever found yourself in the position of trying to explain what it is that credit managers do? Rest assured that most individuals happen to "fall" into credit positions.

As a matter of fact, in 1924 Dr. Theodore Beckman, a professor at Ohio State University wrote that: "In the past, men have come into the credit field without previous preparation. Their entrance into this line was not a matter of deliberate choice and planning and they have had to acquire the special knowledge of the problems that presented themselves for solution largely through experience." (1) Beckman's basic position holds true today.

It may appear as if some things don't ever seem to change. Experience is still one of the best ways in which to learn credit-related skills. For credit managers, the profession has changed. The range of tasks performed by credit personnel has expanded significantly since 1924: moreover, there have been significant changes in the last twenty years. I believe that the skills required to perform as a business credit manager are now as diverse, and oftentimes as sophisticated, as those of any business related occupation.

Research Based Focus Upon Credit Related Tasks

Credit managers have been somewhat of a neglected group by academia. As a former credit manager, I visualized an opportunity to develop a research-based focus that isolated the credit profession. There had not been any business credit management doctoral level studies prior to my study, and there have not been any business credit related doctoral level studies since my study.

In 1983 I completed a doctoral dissertation at the College of Business in Northern Illinois University titled "An Identification and Analysis of Tasks Performed by Trade Credit Personnel" The 650 page study focused upon surveys of 282 graduates from the NACM Executive Program. Certain key excerpts of the study were published as a cover story in the April 1984 issue of Credit and Financial Management, which was the predecessor of Business Credit magazine. The title of the 1984 article was "What Do Credit Managers Do?"

Since twenty years had passed since my original research, I decided that it was about time to find out more about what credit managers are currently doing. Once in a lifetime is enough in terms of writing a doctoral dissertation. This time around, I simply went right to a wonderful source of credit knowledge: attendees of the 2004 NACM Credit Congress.

There were two breakout sessions that were titled "What Do Credit Managers Do?" About 140 attendees were at a morning session, and another 35 attendees participated in a late afternoon session. (There were some other nice activities to partake of during the afternoon timeslot.) The attendees were asked to form into small groups to discuss my original research and then to provide suggestions to share with the overall audience. My role was to try to consolidate and then later form a new list. At the end of the session, each group was asked to turn in a final list of their updated changes to the original list of tasks.

Wow! If you were at either of the Credit Congress sessions you witnessed some very lively discussion. Credit managers agreed to disagree about what they do for a living. I could not possibly find a more enthusiastic audience. I hope that you find the results presented in this article to be of interest. I want to thank each of the participants at the 2004 Credit Congress for their thoughtful suggestions.

Why Focus Upon Tasks?

A job task can be considered to be a complete element of work. In order to construct a listing of tasks the needs of a particular job should first be identified. Specific tasks, can then be validated by people who are employed in a particular job; this is why experienced credit managers were used to first construct the list of credit tasks that had been used in my dissertation 20 years ago. This is also the reason for going back to credit managers to update the listing in 2004.

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