Issues around the conflict between sales and credit will be a hot topic at the fourth World Credit Congress (WCC) to be held in May – the first time the Congress has ever been on the African continent.
Global credit guru Luis Eduardo Perez Mata of Mexico City, Mexico is an international speaker and consulting specialist in credit and collections and believes there should be a new way that companies look at their credit departments.
“Within a company sales is considered as the revenue generator, the main driver and the reason for the organisation’s very existence…to sell something.
“On the other hand, credit is traditionally seen as somewhat of a negative, as a cost centre that represents the worst end of the customer relationship, which is collections, that is the enforcement of payment. Sales is seen as increasing revenue and credit is viewed as increasing costs,” he says.
“The reality is that credit is a fundamental tool for increasing current and long term sales. If a business wishes to develop long term customers then it must make available a sufficient credit capacity. As customers utilise their credit line by making new requests the most profitable of sales, repeat sales are gained.”
Mata is a keynote speaker at the WCC and will be speaking on Commercial Debt Collection, as well as being the congress director.
Another internationally-known keynote speaker is Abe WalkingBear Sanchez of A/R Management Group, USA. Sanchez will be speaking several times, with his focus being on changing how the organisation looks at collections.
“Because of an old and out of date understanding of credit as an accounting function whose performance is measured not by the ‘profit’ it helps generate, but by the ‘risk’ involved – credit has been called the sales avoidance department, the place where sales go to die and, as one CEO put it, the ugly stepchild of accounting.
“This ‘risk at the expense of profit’ thinking leads to missed opportunity costs that easily exceed the cost of slow and no pay customers,” he comments.
“Most companies use the old risk based performance measurements of DSO and bad debt… rather than profit based measurements and, in so doing, they create substantial MOCs.
“The variable costs of time value of money and bad debt too often define and limit the profit role played by the credit and A/R function. Once credit and A/R related MOCs are understood, identified and action taken to avoid them… profitability is enhanced, the ‘bottom line’ goes up.
“Use credit to increase new and repeat Sales, to raise customer service and customer retention levels, to identify and control the very smallest percentage of past due customers who are a genuine risk of failing to pay, to drive down the costs of inefficiencies.
“Do this and those profits that would have resulted from doing something that wasn’t done…will show up on your bottom line.
“This is a one-time event not to be missed,” says Eugene Joubert, Corporate Rebels – local hosts for the Congress.
“The WCCE brings the top International credit and Collections resources to South Africa and combines that with our local talent – the result is that a global picture is formed and the delegates to the congress will have a better understanding of the new trends and “happenings” in the bigger credit and Collections arena,” says Joubert.
The Word credit Congress and Exhibition runs from 14 to 16 May at the Indaba Hotel, Fourways, Johannesburg and covers both B2C and B2B current credit and collections issues.
The full agenda and other details are available online. Accommodation may be booked directly with the Indaba Hotel.
“Within a company sales is considered as the revenue generator, the main driver and the reason for the organisation’s very existence…to sell something.
“On the other hand, credit is traditionally seen as somewhat of a negative, as a cost centre that represents the worst end of the customer relationship, which is collections, that is the enforcement of payment. Sales is seen as increasing revenue and credit is viewed as increasing costs,” he says.
“The reality is that credit is a fundamental tool for increasing current and long term sales. If a business wishes to develop long term customers then it must make available a sufficient credit capacity. As customers utilise their credit line by making new requests the most profitable of sales, repeat sales are gained.”
Mata is a keynote speaker at the WCC and will be speaking on Commercial Debt Collection, as well as being the congress director.
Another internationally-known keynote speaker is Abe WalkingBear Sanchez of A/R Management Group, USA. Sanchez will be speaking several times, with his focus being on changing how the organisation looks at collections.
“Because of an old and out of date understanding of credit as an accounting function whose performance is measured not by the ‘profit’ it helps generate, but by the ‘risk’ involved – credit has been called the sales avoidance department, the place where sales go to die and, as one CEO put it, the ugly stepchild of accounting.
“This ‘risk at the expense of profit’ thinking leads to missed opportunity costs that easily exceed the cost of slow and no pay customers,” he comments.
“Most companies use the old risk based performance measurements of DSO and bad debt… rather than profit based measurements and, in so doing, they create substantial MOCs.
“The variable costs of time value of money and bad debt too often define and limit the profit role played by the credit and A/R function. Once credit and A/R related MOCs are understood, identified and action taken to avoid them… profitability is enhanced, the ‘bottom line’ goes up.
“Use credit to increase new and repeat Sales, to raise customer service and customer retention levels, to identify and control the very smallest percentage of past due customers who are a genuine risk of failing to pay, to drive down the costs of inefficiencies.
“Do this and those profits that would have resulted from doing something that wasn’t done…will show up on your bottom line.
“This is a one-time event not to be missed,” says Eugene Joubert, Corporate Rebels – local hosts for the Congress.
“The WCCE brings the top International credit and Collections resources to South Africa and combines that with our local talent – the result is that a global picture is formed and the delegates to the congress will have a better understanding of the new trends and “happenings” in the bigger credit and Collections arena,” says Joubert.
The Word credit Congress and Exhibition runs from 14 to 16 May at the Indaba Hotel, Fourways, Johannesburg and covers both B2C and B2B current credit and collections issues.
The full agenda and other details are available online. Accommodation may be booked directly with the Indaba Hotel.
