One of the most frequent complaints I’ve heard over the years from credit risk managers is that they don’t feel appreciated for their hard work in trying to increase cash flow and minimize the risk of selling on credit. In fact, as time goes by, some credit professionals are made to feel that their function does not contribute to the profitability of their company by essentially holding back sales efforts.
Traditionally speaking, commercial credit risk management departments are usually viewed as cost centers, necessary for protecting the company from losses — but not directly contributing to revenue. However, a forward-thinking credit risk manager can shift this perception by aligning their risk management activities with sales and the growth of the company. When credit managers help the business say “yes” more often and more wisely, they turn risk assessment into a support function for safe revenue growth.
One way to achieve this is by integrating deeper analytics and data-driven decision-making into the credit process. Instead of relying solely on static financials or outdated credit reports, credit risk management professionals can use predictive analytics to identify high-performing customer segments or industries poised for growth. This allows the company to proactively target better-quality businesses more accurately. When credit decisions are guided by better insights, losses decrease, credit approvals improve, and the business earns more from safer credit granting.
Credit risk managers can also add value by enhancing the speed and efficiency of credit decisions. Streamlining credit evaluation processes through automation, better workflows, or tiered risk assessments helps the company to respond quickly to sales opportunities without compromising standards. A faster credit process improves customer experience, increases the number of contracts that can go forward, and ultimately boosts revenue. In this way, the credit function or department becomes a facilitator of growth rather than an obstacle.
Finally, a credit risk management team that actively monitors customer payments for early warning signs, can intervene before problems escalate. This vigilance reduces losses and recovery costs, preserving both revenue and client relationships. At the same time, monitoring can also uncover additional sales opportunities. Customers who outperform payment expectations may be candidates for an increase in their credit limits, which may encourage them to buy more products. In this way, the credit risk manager becomes a dynamic part of the sales team, unlocking new business potential and helping the company to grow safely and profitably.
Your thoughts and comments (nseiverd@cmiweb.com) are most welcome!
Nancy Seiverd, President
CMI Credit Mediators, Inc.
All Rights Reserved
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