Siloing your sales and credit teams can have detrimental effects on your business, such as missing out on profitable customers, increased risks in collections, and decreased operational efficiency.
Instead, aligning these two teams can increase customer satisfaction, create more streamlined processes, and improve overall profits. Below are five tips for getting your sales and credit teams in sync, and how it can support your business.
1) Identify new sales opportunities through collaboration
Working with a credit team can be invaluable in identifying new sales opportunities. By collaborating with a competent and experienced credit team, businesses can better vet potential new customers and partners to identify more sales opportunities.
This process can help you identify any risk that arises while pursuing the new business, enabling you to make more informed decisions about which prospects to pursue further.
Having a strong understanding of the customer's payment history is critical for maintaining profitability in your organization, and the expertise of your credit department can prove extremely beneficial in this regard.
Not only can a credit team help you identify new sales opportunities, but they can also ensure that your existing customers pay their invoices in full and on time. By tracking customer payment trends and assessing the financial health of new and existing customers, your credit department can reduce the risk of non-payment.
Some of the ways that your credit team can help identify potential customers and manage payment risk include:
- Establishing credit policies and evaluating potential customer’s creditworthiness
- Developing a system to track customer payment history
- Negotiating repayment terms with delinquent customers
- Utilizing collection agencies and legal remedies as necessary.
Your credit team can also help your organization develop relationships with customers and build partnerships that are mutually beneficial. They can help identify potential growth opportunities, such as offering discounts for early payment or providing credit terms to new customers.
Good communication between your sales, finance and credit departments can ensure that customer accounts remain in good standing and payments are received on time.
Ultimately, leveraging the services of a credit team can provide your company with an added edge when exploring new sales avenues, helping you maximize success and minimize financial risk.
2) Reduce and eliminate paperwork through automation
Streamlining your paperwork process can be an easy way to make life a little easier for both your credit and sales teams. By designing a more optimized documentation protocol and investing in workflow-automation software, you can dramatically reduce the amount of manual labour required by both departments. In fact, research has shown that businesses using automation in their accounts receivables process are three times more likely to get invoices paid before the due date.
Plus, freeing up their bandwidth will allow them to focus on their respective tasks without feeling overwhelmed by mundane administrative activities. Ultimately, investing in a streamlined paperwork solution will benefit your business in the long run.
One of the best ways to do this is through automation. Automation enables companies to quickly and easily create, send, store, and access documents. This means that paperwork can be handled in a much faster and more efficient manner. By doing so, you can streamline the entire process from start to finish without creating any extra work for either your credit or sales departments.
Additionally, automating processes can help you to save money by reducing the amount of manual labour required. This can result in cost savings that can be used to fund other initiatives within your organization.
Finally, automating processes will improve customer service since documents can be quickly accessed and handled when needed.
3) Perform credit checks on prospective clients
Performing credit checks on prospective clients is an essential step in the credit application process, as it helps to ensure that borrowers can realistically repay what they borrow. Credit assessment enables businesses to make more informed decisions and better manage their risk strategies.
A good assessment will analyze a client’s credit behaviour, such as making payments past due, not incurring multiple loans at once, and not overstretching existing debts. It is important for businesses to assess each applicant’s financial background to accurately assess the likelihood of them meeting their obligations.
Chaser has a credit checking facility built in, allowing businesses to quickly and easily access a customer’s credit history. This helps to reduce the time spent on the manual processing of applications, as it automatically pulls in data from major credit bureaus. The automated approach ensures that each applicant is assessed fairly and accurately, providing peace of mind for businesses when assessing borrowers.
4) Generate ‘true’ margin reports for sales managers
Generating accurate margin reports is critical to success for Sales Managers. Accurate margin reports provide stakeholders with the information they need to make informed decisions and ensure that the sales team achieves their financial goals.
What we mean by ‘true’ margin reports is that each report should reflect the true cost of goods sold, net profit, and gross margin. This requires access to up-to-date financial information from all suppliers so that accurate pricing can be determined. To generate true margin reports, Sales Managers must carefully calculate costs for each product, as well as any additional expenses or discounts associated with particular sales.
Considering all these factors enables Sales Managers to have a comprehensive view of their operations - down to the individual product level - and provides an accurate representation of potential profits and losses in one centralized report.
Bringing in your credit management team when producing accurate margin reports is also essential. Setting up a proper credit system will help you to identify customers who need to be paid, as well as any overdue payments that should be processed immediately, to help better manage your business’ cash flow.
Having both teams work hand in hand will increase the accuracy of margin reporting, as credit teams can detect any discrepancies or errors in customer invoicing and payments. This helps to ensure that the data used in the report is reliable, while also giving your sales team a better sense of what their customers owe them.
5) Provide visibility to sales reps
Providing visibility to sales reps is a key factor in maximizing their efficiency. By developing strategies that increase the visibility of individual sales reps, such as presenting their successes at team meetings and rewards for excelling in customer service, it is possible to create an environment where they can receive recognition and be incentivized to continue working well.
When sales reps feel visible and appreciated, they are likely to strive for higher performance levels and increased engagement with customers. This type of visibility also ensures that customers recognize the efforts of individual reps and that they feel invested in their success.
There is a range of benefits to creating an environment in which sales reps feel that they are visible within the organization. One benefit is increased motivation and focus, as sales reps become more enthusiastic about their jobs and strive to exceed expectations. This can result in higher sales volumes and improved customer service, both of which can contribute to a company’s overall success.
The best way for a company to create an environment of visibility is by ensuring that sales reps have access to the right tools and resources. Providing easy-to-use, intuitive technology solutions empower sales reps with the data they need to make informed decisions and allows them to provide detailed updates on their progress quickly.
Additionally, employing collaborative techniques such as regular sales meetings and shared goal-setting can ensure that everyone has a clear understanding of their role and responsibilities. Having your credit team assist in creating clear policies and procedures can also help to ensure that sales reps are following the same guidelines.
Good communication between the credit management and sales team also helps sales reps understand if their closed deals have been paying, and can help resolve issues around commission when recently closed customers may be paying late.
Sales reps can also be made aware of any changes in their customers’ financial situations that could call for a check-in or customer engagement conversation. Lastly, having both teams work together to create a streamlined process for issuing and collecting payments from customers can be beneficial in reducing the amount of time spent on manual tasks and back-and-forth between departments.
Teamwork makes the dream work
Maintaining a good relationship between your credit team and sales teams is essential for the success of your business. By following these tips, you can encourage transparency and collaboration between the two teams, leading to better communication and overall understanding.
Try implementing some of these suggestions in your own company today and see how they affect your business relationships! And if you're looking for an automated solution to help manage your credit control, be sure to sign up for Chaser's free trial today.
With Chaser, you can easily track customer payments, automate payment reminders and follow-ups, and access up-to-date financial insights into customers’ financial situations that could help your sales teams make informed decisions. Automating your accounts receivables process with Chaser is the best way to ensure your business has a strong relationship between sales and credit teams for years to come.
