by Paul Amante, CCE, CICP, Amer Sports Winter & Outdoor

Sales guys like to needle the credit team sometimes. I have one sales rep, let’s call him Adam, that jokingly refers to me as the Sales Prevention Manager whenever he gets the chance. Of course, that is a stereotype that many credit practitioners may begrudgingly accept. I do not. I always quip back that my role is sales enablement. I really do believe that is a large part of my role if not the primary mission of the credit team. 

While we all need to operate within the confines of our credit policy and mitigate the risk of bad debt, there is always a way to say yes and make the sale. Now, that may not be on the terms that the customer or the sales team would prefer, especially when there is so much risk that prepayment is a requirement, but “yes, if the order is prepaid” is still a yes. The credit team is not preventing sales. That is not our mission. We are tasked with preventing bad debt and ensuring timely payment is received from our customers. If we do that, the customer relationship is preserved and sales to the customer continue.

I have seen cases in the past where a customer that pays really well when you keep them on a tight leash but falls behind if you loosen the reins. For instance, that prepay customer that orders every week and does just fine paying cash in advance but if you extend a small credit limit on Net Terms they pay poorly and hit credit hold. Or the customer who does really well at paying regularly when they have a low credit limit that allows them to buy just what they need but if you increase the credit limit they overbuy and fall behind on the payables because they can’t turn the inventory quickly enough. Sometimes the credit manager needs to do what is best for the customer and enable continued sales to that customer by providing tighter terms and limits than what is requested.  

The extension of credit, both commercial and consumer, is critical to our economy and our businesses. However, there are times where prepay is the right answer to enable sales. Providing restrictive terms or limits is a valid approach with some customers. Regardless of what the sales team may think, our role as credit professionals is enabling the sales team and the customer to continue working together by ensuring the customer can pay. Even if they must pay in advance.

I always enjoy answering Adam’s call because I know the sales prevention joke is coming. Caller ID is awesome. I usually just pick up the phone and say, “Sales Enablement Department…this is Paul…”