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Published Articles by David Balovich

Published in: Creditworhty News
Date: 1/29/98

Two weeks ago we discussed the need to review and update operational procedures. The role of management is to Plan, Organize, Control and Report.

Without current procedures in place it is difficult for management to carry out its role. In addition to operational procedures that deal with the extension and maintenance of credit, we should also include in our planning those procedures that affect our overall performance within the organization.

There should exist a current organization chart that defines the position of each member of the credit department and their responsibility and authority.

Additional procedures should include but are not limited to:

Recruiting & Hiring Guidelines Education by position Experience by position Training & Development Performance review criteria Progression requirements Workshop & tuition reimbursement Promotion & termination guidelines

There should be reporting requirements which may include reports on:

Accounts over credit limit Open items by age & category Highly leveraged transactions Accounts placed with collection agencies Accounts in litigation Reserve for bad debts Accounts written off to bad debt Unapplied cash Unauthorized deductions & reasons Collections to beginning a/r Accounts in bankruptcy Credit department overrides Travel & entertainment expenses

Finally, we should have budget categories to track those expenses related to the operation of our department. These may include:

Salary - overtime Space - equipment Supplies - software Training - education Travel - entertainment Collection- investigation

Maintaining current procedures and reports provides us the ability to control the activities we are responsible for and accomplish our goals and objectives.

I wish you well

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