Written by Govindraj Muthyalu CPA, CIA, CISA
Have you ever heard a school or college kid saying “I want
to be a Credit Controller”? I am sure
you have not. However, you must have
heard kids saying they want to become a Doctor, Engineer, Pilot, Teacher,
Journalist, Astronaut, Accountant, Lawyer, Banker etc., but not a Credit Controller.
Even though kids do not aim to be Credit Controllers, it is surprising to note that there are hundreds
and thousands of Credit Controllers across the world who are adding lot of
value to their organizations.
Most of the newly-hired credit controllers undergo
on-the-job training to transition to their duties smoothly. Credit Controllers are primarily responsible
for collecting the debts and improving the cash flow of the company. Credit Controllers’ role starts after a sales
person brings a customer’s Purchase Order and ends after they collect the money from the
customer. It is said that “A Sale is a Gift until You Collect the Money”. In a way, Credit Controllers ensure
that the sale does not become a gift by collecting the money from the customers. Credit Controllers also work for debt collection agencies where they are responsible to meet set cash and debtor targets on a daily basis.
Though Credit Controllers contribute a lot to the company, they do not get the kind of recognition that sales, marketing, finance,
and other departments get. On several occasions, people within and outside the
organization dislike Credit Controllers for doing their job sincerely.
Credit Controllers
and Sales Persons
Credit Controllers regularly liaise with sales department to
resolve credit issues smoothly. However, sometimes there are situations when
they decide not to offer credit to a customer. In such situations, the sales
department thinks that Credit Controllers are creating road blocks because of
which they are unable to achieve their sales targets and earn their sales
commission.
Credit Controllers
and CFO / FM
Many a times the CFOs / FMs feel that Credit Controllers are not doing enough to collect the overdue invoices, even though the
delay in payment of invoices by customers may be because of issues like
incorrect invoicing, proof of delivery, credit notes, or any other dispute which
is not related to credit department. Credit Controllers are always under
pressure from CFOs/FMs to collect their debts faster and reduce the DSO (Days
Sales Outstanding).
Credit Controllers
and CEO / Owner
Sometimes the CEO / Owner overrules the credit advice of Credit Controllers and offers credit to non-credit worthy customers because of business considerations. In such cases, it is little frustrating for Credit Controllers to follow-up and collect the debts of customers to whom they had decided
not to offer credit in the first place.
Credit Controllers
and Customers
Credit Controllers are supposed to be regularly in touch
with customers and resolve all issues related to invoices and ensure that the
money owed to their company is collected.
But sometimes there are situations when he/she has to put the customers’
account on credit hold if the customers default payment or customer’s credit situation
changes. In such situations the
customers dislike the credit controllers even though they are doing their job
as per company’s policy.
Conclusion
Credit Controllers are the Unsung Heroes of the company.
They always put company’s interest above everything else, even at the cost of
becoming bad people in front of others. Day
in and Day out, they think of collecting the debts of the company and doing
whatever they can to ensure that the debt does not go bad. They are as much
concerned about the liquidity of the company as CFO, FM, CEO and Owner are. All
their decisions, like denying credit to a customer, giving credit advice to the
CEO / Owner, chasing a customer for payment, are all in the best interest of the
company.
I feel that, all the people within the company especially the Sales persons, CFO, FM, CEO, and owner should appreciate Credit Controller’s role and respect their decisions. After all, they are also working
in the best interest of the company, and doing their best to protect the company
from going bust by collecting the debts of the company.
About Govindraj Muthyalu:
Govindraj
is a CPA, CIA, CISA and has more than 25 years of finance, accounting, auditing, and IT experience.
He has worked as a controller and a CFO of many multi-million dollar
companies. He is a Gold Winner under the category "Executive
of the Year - Computer Software" at International Business Awards 2016
held at Rome, Italy, and a Bronze Winner under the category "Executive
of the Year - Cloud Computing / SaaS / Internet" at Golden Bridge Awards
2016 held at San Francisco. He has lot of experience in designing
systems / processes, and implementing ERP packages in various industries.
He is the CEO of Cashpundit Inc., a startup that he founded
to help businesses manage their collections and cash flows.
