3JM Company Inc.

Published Articles by David Balovich

Published in: Creditworthy News
Date: 7/29/99

When I began my career, many years ago in credit, it was on the consumer side. I went to work for a consumer finance company as a management trainee which meant I was nonexistent. I worked in every area of the company and was junior to every clerk I encountered but I learned the function I was to eventually be responsible for inside and out and became proficient in performing every function adequately. In fact, promotion to the next level of training was based on demonstrating to the satisfaction of each department head that I was proficient.

Eventually, I worked my way up to branch manager. Upon reaching that lofty title I was not only capable of managing my office but I could also perform the function of every position reporting to me.

 Somewhere during the time I started until now, the position of manager has ceased to require any experience in the application of the function but rather the ability to plan, organize, and motivate. In some areas that may apply, however in the area of credit & collections we have made a grievous error, in my opinion. 

Although we speak of credit and collections as a profession the reality is that it is a technical position. Theodore Beckman, professor emeritus at Ohio State University, wrote in his book Credit & Collections in Theory & Practice: 

More often then not the individual did not plan a career in this profession but came into it without any previous knowledge, experience or training. Professor Beckman wrote that in 1926. Look how far we have come in the last 73 years. How many credit & collection positions require degreed individuals versus the other positions in our organization such as sales, purchasing, marketing?

 Most people employed in our profession have less then two years of college. Only one in five of the positions publicly advertised require a college degree and only one in ten require some type of college experience. (source: NACM)What this has led to is a group of credit & collection personnel who are performing a task that they are not prepared for. They do not know the differences between a corporation and a proprietorship; the differences between a subsidiary and a division; that a guaranty of payment must be in writing and that a personal guaranty not include a title. They are completely unaware of Regulation B and its ramifications if not adhered to and a host of other information that is required to do the job they were hired to do. And why? Because management is not aware of this as well and do not train their employees. In many cases employees are being misguided by the people they rely on to instruct them in what they can and cannot do. How does one motivate when the employee cannot rely on their management for proper guidance? 

We cannot expect our employees to meet the goals and objectives we have set for them unless we, as managers, know what they are doing and see that they are sufficiently trained, correctly, to achieve those goals and objectives.Are you functional?

I wish you well.

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