What does a credit manager do on the job? As the professional in an institution who is responsible for overseeing all of the credit policies procedures within a specific department, it is only practical to assume that you must have a working knowledge of business management and finance.
Determining When and When Not to Extend Credit to Customers
You must understand how a company extends credit to customers to gain a full understanding of the roles of a credit manager. When a company wants give their customers the option to buy products with cash or on credit, they can increase their sales by attracting the customer base who cannot afford to pay for large ticket items all at once. Organizations that cannot afford to extend credit to clients because they will not be paid immediately will lose a large client base to competitors who can, but organizations who can afford to still must monitor applicants to choose the right clients to approve.
One of your biggest responsibilities as a credit manager will be determining whether or not a customer should be extended credit. Choosing the wrong customers with a reputation for delinquency will lead to high delinquency rates, which means that the company is being too lenient in its underwriting process. As you are assessing a customer’s credit profile, you will determine if the customer has the ability to pay, job stability, stability at their residence and willingness to pay. By running a credit report and reviewing a credit application thoroughly, credit managers will make the smartest decisions for the organization concerning credit.
Related Resource: Director of Finance
Departmental Duties of a Credit Manager
In addition to reviewing credit applications, a credit manager will supervise the analysts within the department. In a single day, you may be responsible for setting credit limits, collecting delinquent payments and overseeing a department to ensure it runs efficiently. You must set a goal on the number of customers the organization needs to approve and then approve the right applications so that the organization can make a profit. If the costs of approving credit were to get too high, extending too many different lines of credit can actually be damaging. This is why managers must oversee the statistics of credit data, limits and delinquency rates to determine if the company will be able to profit.
If you are interested in becoming a credit manager, it is important to learn more about the job profile so that you make a sound choice. Rated as one of the best jobs in America by CNN Money, the average salary reported in the nation is $72,900, with the highest paid professionals earning $135,000. In addition to a high average salary, job security in the field, personal satisfaction on the job, a credit manager career is a great job choice.
