How do we go to battle within Credit Management?
Finding the right people for the job certainly hasn’t become any easier in 2024.
The war on talent is raging more fiercely than ever, and we are now even talking about the war on people. Experience or no experience, degree or no degree, there is work for everyone! Or so it seems.
The tightness in the labor market continues to grow; within finance and more specifically Credit Management, the cries for the right support are also growing louder. After all, Credit Management is not an activity you can simply postpone because there are no people available. Failing to follow up on outstanding invoices has an immediate and significant impact on business operations.
We spoke with Marleen Miechielsen, Credit Management expert, and Stephanie Cammaerts, HR Manager, about the possible solutions and support companies can utilize in the field of Credit Management and the difficulties these entail today.
Is it best to insource or outsource credit management?
Marleen:
The fact that a company practices good Credit Management is essential for healthy business operations. Although, unfortunately, there is no ultimate magic formula that every company can apply. There are so many different factors at play here that are not the same for any two companies. Just think of the size of a company, the cost structure, the sector in which it operates, the personnel structure, the general corporate culture, and so on.
A dedicated Credit Management team also cannot carry the responsibility for a good policy alone. It is important that all departments understand that good accounts receivable management is important so that they can use their specialization to help ensure that invoicing runs smoothly in all its aspects. Even when (part of) the accounts receivable management is outsourced to an external partner, internal employees must never lose sight of this.
Stéphanie:
It is often the case that companies would like to hire their own staff to do Credit Management full-time, but they simply cannot find this expertise on the labor market. It may also be that a company only needs support temporarily or not full-time because many Credit Management tasks are handled by other departments. In that case, outsourcing certain tasks can certainly be useful.
Marleen:
Absolutely, the advantage of this method is that no investment in personnel, systems, and other tools is required. It also offers a lot of flexibility. Support can be provided during peak periods. During less busy periods, you can easily scale down without this affecting your headcount. As a client, you can also determine the conditions the employees must meet yourself, so that the uniformity and continuity of the service can be guaranteed by the external partner. The end customer should always feel they are in contact with the company they have a relationship with.
Stéphanie:
A good briefing to the outsourcing partner and its employees is truly essential here. External employees must not only be well-informed about the products or services of the client in whose name they work, but the work processes, corporate culture, and tone of voice must also be clear. Only then can they perform their work properly.
Can temporary workers offer a solution?
Marleen:
Temporary workers are a great asset for temporary assignments. For example, they can clear backlogs or fill in during illness or temporary absences of permanent staff. They can take the pressure off.
The advantage is that temporary workers are not on your own payroll. In this way, you can also view it as a kind of trial period before you would hire someone permanently.
As a company, you pay a fixed price per hour or per day to the staffing partner, allowing you to calculate and control costs perfectly. The staffing agency acts as an intermediary and searches its own database for a suitable profile.
Stéphanie:
From an HR perspective, there are some pitfalls to be noted with temporary contracts, and it is a very dual situation.
As an employer, there can be a risk that the expertise and commitment of the temporary worker is limited since it concerns a temporary assignment. Meanwhile, as an employee, it is often seen as an opportunity to gain many different experiences and build up very broad knowledge and expertise. The non-binding conditions and the fast-paced nature of temporary contracts are actually liberating for many employees.
Unfortunately, within recruitment, we all too often see that these people are being led on. In this way, they end up in a vicious cycle of temporary work that is difficult to escape because they struggle with the prejudice of being a “job hopper.”
Why is consultancy different?
Stéphanie:
A consultant is permanently employed by the consultancy partner, who also takes care of the training and guidance of its consultants. When you call on a consultant, you are therefore certain that you are hiring a temporary worker who is an expert in the field. A consultant’s commitment is also often higher because they act as an ambassador for their company and also want to bring multiple projects to a successful conclusion with that same employer.
Marleen:
With consultancy, you are calling on expertise. I remember the fuss surrounding the government’s consultancy spending last summer. The question there shouldn’t have been how much it cost, but rather what it yielded.
Consultants are also a great added value because of their availability; they can be deployed immediately to optimize accounts receivable management. Their knowledge of the subject matter will not only be able to solve pertinent problems, but through an optimization of the processes, the consultant can also leave again with peace of mind.
Stéphanie:
Provided the internal employees are open to a consultant’s input, of course. When various levels of knowledge are brought together, it can produce very fine results. A consultant should therefore be somewhat reserved at the beginning: a consultant doesn’t know better, a consultant knows different things than the internal employees. And they should exchange their knowledge and learn from each other.
Can you already fully automate credit management?
Stéphanie:
Within Credit Management, our people are working more and more with automated systems; they also help to further develop and optimize them. I am therefore convinced that automation and certainly AI will increasingly claim their place.
This may seem futuristic, but think of robocalls with preset messages, automatic selection menus, or chatbots that are increasingly driven by AI instead of humans. These systems are already very familiar to us and we now find them quite normal. For example, AI can already recognize that a customer’s tone is becoming agitated and decide to switch to human contact.
Marleen:
Am I old school when I find human interaction in credit management indispensable? I don’t think so. A good complement of human and automated contact, a combination of artificial and human intelligence, in my opinion, still works best. And whether it is internal or external staff matters less. As long as the customer is central and actions are taken correctly according to the objectives, we are on the right track!
So there is no single best practice in the field of credit management. Before you go to battle in the war on people as a company, it is important to analyze your own needs and, based on that, choose the right allies who can best execute your strategy.
