The credit team and sales team of a company can frequently end up working in seclusion with one another. Truth be told, with one attempting to crack faster deals and the other entrusted with adjusting credit expansion against risk, it could seem like they’re on rival sides. However, organizations that don’t utilize the potential of a collaborative sales and credit approach are losing out on big opportunities.
This blog specifically talks about the collaboration that needs to be brought between the credit and sales teams along with the best practices that can help companies on both fronts.
In the quest to acquire new business opportunities while managing risks, have sales and credit teams always been on the same page? Can these two teams exist side-by-side?
The main attention of the sales team goes into closing a deal as quickly as possible without considering much the risk factors related to a customer’s credit. Which is why it sometimes tends to disappoint the sales team when the credit team puts a halt on a deal. However, from a different perspective, the credit team is concerned with extending credit in accordance with the company’s credit policy and lowering risks so that any chances of loss or bad debts are eliminated.
Quite naturally due to this mismatch of responsibilities and the existing communication gap, customer relationships are often negatively impacted and a lot of effort put in from either of the teams is wasted.
In spite of the different roles of sales and credit teams, they aim to achieve the same target, which is increased revenue and reduced risk. Which brings us back to the question, can the sales and credit team exist side-by-side?
It is important for both the teams to understand that their efforts are of immense benefit when they work collaboratively. The first step to achieve this is to establish clear communication between the two teams. If each team has a good understanding of the various roles that the counterpart plays, then the inter-team collaboration becomes a lot easier, which eventually leads to a win-win situation for both the teams. This will improve the customer relationship and help both the teams to onboard customers faster.
On the whole, an alliance between the two teams can be considered as a necessary factor for achieving their common goal of revenue increment and risk reduction.
For a successful partnership between credit and sales, there needs to be a thorough understanding of the expectations of both teams from each other. For a business to grow as a whole, the expectations need to be fulfilled and communicated better among them.
What does the Sales Team expect from the Credit Team?
1) Real-time access to credit data in the initial stage of the sales process is beneficial to have clear risk visibility associated with the customer. This will help the sales team make the right decisions while closing a deal and make on-spot order releases easier for on-field agents.
2) Faster customer on-boarding means better customer relationships. The involvement of the credit team in a sales process can help in the pre-approval of customers. This will help the sales team to move on to the next step of the sales process faster.
3) Identification of potential customers can lead to better utilization of the sales team’s resources. Customers who are likely to get rejected are eliminated easily without wasting any valuable resources on a dud deal. Suggesting potential customers after evaluating credit terms can help approach more customers which in turn, increases revenue.
What does the Credit Team expect from the Sales Team?
1) Capturing the complete customer picture is one of the many responsibilities that the sales team has to take. They can provide the credit team with inputs that can help them assess the financial health of the customer. These inputs can help avoid potential risks in the future.
2) Allowing involvement during the early phase of customer interaction can be a proactive approach. This would help the credit team capture necessary information from their point of view and improve customer relationships with better credit forecasting.
3) Assisting the collections process using sales relationships can speed up the collections and result in faster revenue collection.
At the end of the day, sales and credit cannot function without each other. The collaboration of the two is a sign of successful trade and helps to achieve the objectives of boosting revenue and risk mitigation.
Technology is the magic of the modern world. And one of the many magic tricks is automation. Automation can truly lift the weight of an uncooperative environment and kickstart the combined effort of the sales and credit teams to achieve a common goal.
Proper use of technology can help your sales and credit teams become more agile and help your company achieve:
In conclusion, by reducing its manual effort and providing them with a space for effortless collaboration, any company could achieve less bad debt and more profit.
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HighRadius Credit Software automates the credit management process, enabling credit managers to make highly-accurate credit decisions 2X faster and enable faster customer onboarding with 4 primary components: configurable online credit application, customizable credit scoring engines, credit agency data aggregation engine, and collaborative credit management workflow. Along with that, there are a lot of key features that should definitely be explored some of which are online credit application, credit information aggregation, automated credit scoring & risk assessment, credit management workflows, approval workflows, and automated bank & trade reference checks. The result is faster customer onboarding, better internal collaboration, higher customer satisfaction, more targeted periodic reviews, and lower credit risk across the company’s customer portfolio.