Dear Crabby,
I’ve been managing credit for more than a decade, and I pride myself on being firm but fair. Lately, though, our sales manager has been pressuring me to approve a large credit line for a customer whose financials are shaky at best. I’ve reviewed the statements, checked the trade references, and even ran a few credit reports — and every sign points to a high risk customer. Yet my sales manager insists that this customer is “strategic” and that we “can’t afford to lose them.”
I feel like I’m being asked to sign off on a slow-motion write-off. How do I protect the company (and my sanity) without starting a war with management?
Signed,
Cornered in Credit
Dear Cornered,
Ah yes — the classic “strategic customer” situation. Somewhere in every credit manager’s career, there comes a moment when the boss says, “Just this once.” But let’s be honest — “just this once” often turns into a new one “every quarter.”
When you’re being pressured to extend credit against your better judgment, you’re not just fighting for one decision; you’re defending the integrity of your credit policy and protecting the company’s assets. And believe me, once that wall cracks, the floodgates open fast.
Here’s how to handle it like a pro — and still keep your job.
Separate Your Emotions from the Evidence: Before confronting your sales manager and other upper management, make sure your case is airtight. Summarize your findings in clear, factual language:
- The customer’s latest financials showing declining margins or negative cash flow.
- Trade references confirming late payments or reduced terms.
- Credit-agency data flagging high delinquency risk.
Keep It Short, Visual, and Verifiable — Executives tune out long lectures but respect data they can’t argue with.
Speak Their Language — Revenue and Risk: Your sales manager probably isn’t dismissing your expertise; he’s focused on top-line growth. Translate your warning into business terms he and the rest of the upper management team will understand:
“If this $200,000 sale goes unpaid, we’ll need $4 million in new sales at a 5% margin just to break even.” That usually shifts the conversation from “You’re blocking sales” to “Maybe we should rethink this”
Offer Controlled Flexibility: Saying “no” outright can sound adversarial. Instead, propose alternatives that protect the company while allowing the deal to move forward:
- Split the order: approve 25% on open credit, require the rest via prepayment or letter of credit.
- Request partial collateral or a personal guarantee.
- Offer shorter terms with milestone releases.
This shows you’re a solutions-oriented credit professional, not an obstructionist.
Put It in Writing — Politely: If the sales manager and upper management still overrule you, document the decision. Send a brief confirmation email summarizing the discussion and the potential exposure. You’re not covering yourself out of spite — you’re creating institutional memory. If the account eventually turns sour (and it often does), no one can claim the credit team didn’t warn them.
Maintain Your Professional Calm: It’s easy to take these battles personally, but remember credit risk isn’t eliminated by disagreement, only managed by discipline. By staying factual and unemotional, you reinforce your credibility. Over time, even the most aggressive managers and executives come to appreciate the person who protects profits when everyone else is chasing sales.
Bottom Line: Credit management isn’t about saying no; it’s about knowing when to say it — and how to back it up. When leadership pushes for risky exceptions, keep your analysis firm, your tone professional, and your documentation airtight. Sooner or later, the numbers will prove you right.
Stay strong and keep that credit backbone straight.
Crabby
Dear Crabby is a credit, collection, and human resources advice column by Nancy Seiverd, President, CMI Credit Mediators Inc. Your thoughts and comments (nseiverd@cmiweb.com) are most welcome!
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