The role of the credit manager has been undergoing a significant evolution for several years. Whereas this function used to be limited to monitoring creditworthiness and following up on outstanding payments, the current economic and business context requires a much broader and more strategic approach. And yet this modern approach seems to be struggling to break through.
From simple supervision to strategic linchpin
A credit manager's field of work used to be relatively manageable. Most companies knew their customers personally and did business within a limited region. Checking creditworthiness was often straightforward and based on personal trust and local reputation. The credit manager had mainly an executive role: assessing creditworthiness, monitoring payment of invoices and, if necessary, sending reminders or issuing telephone reminders for overdue payments.
In doing so, there was a certain tension between sales departments and finance staff. A tension that in many companies even today has not been completely swept away. Whereas salespeople came in excited with new orders and sales contracts, credit managers often had to temper the revelry because some customers were simply not creditworthy enough. This regularly led to internal conflicts where sales and finance were diametrically opposed, like two camps with opposing interests.
The new challenges: fraud and compliance
Today, practice looks very different. A credit check remains important, but credit management has now become an essential part of strategic business operations. Or at least it would look nice on paper. In any case, the role of credit manager involves much more than just credit monitoring. Modern credit managers play an active role in improving profitability, optimising sales processes and managing multiple risks.
One of the most important new responsibilities is fraud prevention. Fraud today is a growing problem that any business, regardless of size, can face. Fraudsters use sophisticated techniques to bypass traditional credit controls and often manage to artificially improve their financial health to appear creditworthy. Credit managers must therefore be alert and constantly adjust their control mechanisms.
In addition, compliance occupies an increasingly prominent place within credit management. Large companies in particular are obliged by strict legislation to monitor their customers and suppliers for issues such as money laundering, terrorist financing, undeclared work and corruption. But smaller companies also have every interest in carefully checking who they do business with, to avoid reputational damage by dealing with dubious parties.
Shock resilience and long-term thinking
Another crucial concern is shock resilience. Credit managers today should also think about the long term and consider the possibility of economic shocks and unexpected events. This requires in-depth analysis and scenario thinking: how well is a company able to withstand future crises, political changes or disruptions in the market? As a result, risk management is no longer limited to the short term but becomes a strategic exercise that also concerns the highest levels within the organisation.
Cooperation with commercial teams
Supporting commercial teams has also become part of the credit manager's remit. Why spend time and energy on unhealthy prospects? By steering sales teams towards creditworthy prospects, together they maximise the return on sales efforts. Instead of conflict, today, we see more and more collaboration between finance and sales, with shared goals of growth and profitability at the centre.
The credit manager at the table in strategic decision-making
In larger organisations - where a compliance manager or an ESG officer is often appointed - these tasks may not all end up on the credit manager's plate. But to fill the new, more comprehensive role successfully, credit managers need to step out of their comfort zone and be more closely involved in strategic decision-making. Ideally, they should report directly to the CEO or be part of the management team so that they can assume their broader responsibilities and better contribute to the sustainable growth of their company.
Although this strategic interpretation is far from being integrated in every company, the modern credit manager can clearly play a key role in securing continuity, managing risks and driving commercial performance.