Why Having a Good Relationship With Your Credit Department is Essential in Sales

There are a great many internal relationships which you should build and improve upon when working sales.  While all of them are important, I want to explain why focusing on building a relationship with your credit department can be of huge consequence to your sales performance.

The automation of the credit approval process will lead many to say that the line between getting credit and being refused credit is black & white.  On top of that (with a full recession underway), credit has tightened even further as of late for prospective customers with marginal credit.  If this is all true – then why in the world would building a relationship with your credit department still matter?

While your credit guy might not be able to put together a $25,000 line of credit for a prospect with poor credit, he can still do several things for you.  I have listed below three critical items that your credit guy or gal will usually have control over that could affect your sales:

1) For customers which buy on a regular basis, your credit contact might be able to extend terms slightly. For instance – if a customer is past due by 60 days and is cut off, your credit contact might be able to squeeze another order in for your customer with a promise of payment.  We all have accounts that pay slow, but the accounts I’m talking about here are the ones we know will pay eventually. Not only does this make it easier when an order is needed by your customer before a check can be cut, it also shows your customer that you have a sphere of influence and power within your company.  In short, you end up looking like a more powerful and influential individual in the eyes of your customer.

2) We all need credit limit increases on our accounts from time to time, especially on customers who don’t have a great payment history. While many will say this is another black & white issue in credit, I disagree.  As long as companies put a human in charge of approving or denying credit, there is still a human decision in play that can be influenced.  Having a great relationship can possibly allow you to up a customer’s credit limit to the needed level.  Without being able to influence your credit department in this area, you leave yourself wide open to lose future sales and get egg on your face when a credit increase request is denied.

3) For smaller prospective customers with marginal credit, a small credit line with heavy monitoring could be approved by your credit department. In our current economic climate of shrinking sales, this could be of huge importance in attracting new customers.  While this will usually apply primarily to smaller potential customers, never forget that big customers were at one time small customers.  While you need to use good judgment on whom you are willing to pull the trigger on in this area, having a small customer on board that has good growth potential can be very beneficial to your sales numbers in the future.  If they can build a good payment history, a customer in this arena will also already have the needed credit line in place for when they actually become a bigger customer.

A quick word of caution to everyone, please make sure to perform an internal “gut check” with every credit request that you might be able to influence.  You need to build your internal credit relationship on trust and you must not hang your credit department out to dry.  If you don’t have a reasonable belief that a prospective customer will be credit worthy, you will end up using all of your “juice” with them rather quickly.  There will come a time when you will certainly need it, and you cannot expect a favor with your credit department if you have a poor history with them.  If you take the time to build a great relationship with your credit folks, I promise you it will increase your goodwill and loyalty among your customers.

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