Magazine article Business Credit

The Future of Credit and Its Effect on the Bottom Line in the Information Age

Magazine article Business Credit

The Future of Credit and Its Effect on the Bottom Line in the Information Age

Article excerpt

In today's information age, it is often daunting for businesses to locate reliable and accurate sources of mission-critical information. With the worlds" resources just an Internet click away, time wasted on trying to find it has become this era's Pandora"s box. The challenge is threefold: find a quick, trusted source, find an inexpensive means to harness the data and find tools to transform the data into an informed decision that will positively impact a company's bottom line.

Industry-leading corporations are finding the solution to these issues from an internal resource - the credit professional. Acting as a gatekeeper for the company, the credit professional has traditionally performed tasks such as assessing new business risks brought in by the sales department. However, with the advent of new technology, the role and responsibility of the credit professional is rapidly changing. The credit professional is now able to compress the transactional time of requests, share information through corporate Intranets and institute uniform policies and procedures.

Expanding Credit's Role

Credit professionals are experts in establishing the identity and condition of business partners, and the Internet is another area where their skills are required. As more business is conducted over the Internet, it will be the credit professional who will validate those businesses and ultimately approve business-to-business commerce on the web.

At a credit professional's fingertips resides priceless business data critical to sales success that not only assesses business risk, but can also be used to locate the most viable new business leads. Corporations are shedding the traditional perception of the credit professional as a roadblock and instead are viewing credit as a valuable resource that can arm the sales force with the information to qualify and close larger accounts. With new technologies, the credit professional's fast reaction time generates repeat business, provides the sales force with more opportunities to cross-sell and extends time to qualify new business leads. Now the credit professional can act proactively to share, enable and empower the rest of an organization with the knowledge base that resides in the credit department.

Through sharing this information, the credit department is removed from its isolation and is demystified to the rest of the organization. This results in better collaboration and communication between departments and helps break down institutional barriers to success. When the information residing in the credit department is used by the whole organization in a proactive instead of reactive manner, it fosters teamwork, reduces sales cycles and results in more business wins.

Just as the calculator replaced the abacus, credit scoring is yet another time reducing, productivity enhancing, technological tool that enables the credit professional to work more efficiently, across the company's entire business. Credit scoring automates a credit professional's expertise to quickly ascertain the creditworthiness of a prospective customer. Predictive scoring gives credit professionals the unique capability to reengineer processes and deploy knowledge-based sales marketing tactics within the organization. These tools provide support for the decisions that the credit professional must make.

Credit and Sales

A recent study by the Credit Research Foundation (CRF) on the future of business credit found that more than 80 percent of credit professionals are now in a partnering role with sales and marketing staffs. According to the study, credit professionals are working along side sales professionals to help locate the most qualified customers and to close deals. Decision support software is one of the enabling technologies that will allow credit professionals to accomplish this by working smarter and not harder within their organizations. With advanced decision support tools, the credit professional is free to set, monitor and refine credit rules that can be applied and shared enterprise-wide. …

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