Transactional Finance Spotlight: The Importance of a Credit Manager

Rutherford Cross’ Eilidh Graham looks at the importance of the role of Credit Manager in this spotlight on transactional finance.

The transactional finance team can underpin the success of a company. Transactional finance focuses on three key areas: Accountancy Support, Ledger Management and Credit Management and Control. Depending on the size of the company there may be a small mixed transactional finance team or specialist departments focusing on each area. Each of these areas is vital to ensure the successful management of debt and credit. Graydon outlines that over 50% of all commercial bankruptcies are due to poor credit management, highlighting the role of the Credit Manager as imperative to the success of the business.

A Credit Manager’s role is one that can vary significantly based on the size of the company and the teams they are managing. The key focus on this role is to successfully manage the debtor ledger, however a successful credit manager will have an all-encompassing role.

Managing Debtor Ledger

Perhaps most obviously, the Credit Manager is responsible for ensuring timely payments are received on outstanding invoices owed to the company. They also have a responsibility for the management of unpaid invoices, finding out why they have not been paid, when the payment will be received and if there are any disputes with the payment.

Building Relationships

The role of Credit Manager is increasingly about being able to partner with internal departments as well as external suppliers. Internally it is the Credit Managers responsibility to ensure that staff understand the importance of timely payments, correct invoicing procedures and external relationship building.

The Credit Manager must also work on building external relationships with suppliers and providers of services as the world of Credit Control and Management is extremely fast-paced, demanding and crucial to both stakeholders meaning that a strong relationship is quintessential to both parties.

Team Management

In Credit Management a formidable team is your most valuable asset. The Credit Manager must focus on building their team to work cohesively in all aspects of Credit Management. Effective credit management will allow for: on-time payments, maintaining customer relationships, reduction of aged / bad debt, early detection and mitigation of risk and detection of complaints.

If these key elements are implemented by the Credit Manager, a company could expect to see a rise in profit due to the improvement of cash flow. Organisations should look to invest in a commercially aware, enthusiastic, and intuitive Credit Manager with strong teamwork skills to ensure the success of their business and their continued relationships with external stakeholders.


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