Yet, every day credit professionals are offered the opportunity to obtain the most current information about their customers and they continue too overlook this opportunity to gather this vital information.

I was reminded of this recently when I called one of my clients who was away from their desk and I was transferred into their voice mail. This is what greeted me: “Hi, I’m sorry I can’t take your call, I’m away from my desk, please leave your name and number and a brief message and I will return your call. If you are calling for a credit rating please fax your information to 555-555-5555 or email your request to credit information@goodluck.com.”

More often than not I hear credit professional complain they do not have the time and in some cases the inclination to field credit requests. Yet, what an opportune time to gather the most current information about our customer.

The other party calling for a reference is either a new vendor attempting to obtain information to open a new account or an existing creditor updating their information. Regardless of the purpose of the inquiry we have the opportunity to talk with another party who has information that is current.

If it is vendor with a new application then often they have the most current information available. The information we should be asking from them in exchange for the information they want from us would be:

§         Names of other creditors provided by the applicant

§         Names of officers, owners

§         Phone numbers and addresses

§         Bank information

§         Legal entity of customer

§         Purpose and amount of credit

Often our customer changes vendors, addresses, owners, officers, and legal composition without that information filtering down to the credit department who often does not find out about it until there is a negative transaction.

If the inquiry is an update on an existing customer, this is an opportunity to discuss with fellow credit professionals what their experience with the customer has been and most importantly the reason for the update. All too often, unfortunately, customer accounts are updated for only two reasons:

1.    They or sales has requested an increase in their credit line, or most commonly 

2.    They are past due and not returning phone calls.

The function of credit management is to support sales and minimize risk. Risk cannot be minimized with information. We should never be “too busy” to obtain information about our customer whether they be new or an old account.

80% of collection problems exist with long time-established customers. The reason for this is because we tend not to update our existing customers as often as we should. The number one reason given for not updating customer files is time. Think about this, every time we receive an inquiry for credit information that is an opportunity to update a current customer.

Lastly, responding to credit inquiries personally allows the credit professional to develop a network of contacts that can be called upon for many reasons.

I wish you well.  

This information is provided as information only and not legal advice. Legal advice should be obtained from a competent, licensed attorney, in good standing with the state bar association.