Credit Insurance Blog

The Credit Manager: An Under Appreciated Asset
by Joe Ketzner

The Credit Manager: An Under-Appreciated Asset

Ever wonder why the corporate credit manager always looks like he/she needs a day off?


Think about it; how many professionals hold the primary responsibility of driving a company’s top-line while at the same time ensuring that each of these “sales” comes to a successful conclusion having payment received in an acceptable period? A case could be made that the Credit Manager is the most important professional within the organization except for one...

We aren’t talking about the super sales guy, or the CFO, or the Ops manager, or the IT director, or virtually anyone else in the organization except maybe the CEO.

Credit management is equal parts science and art. The professional credit manager knows that not all companies are creditworthy, but simply denying credit takes little skill and will infringe on top-line performance. Conversely, accepting all orders takes even less skill and will certainly lead to higher bad debt losses and margin erosion. The Credit Manager is one of the most important assets of any organization.


Free Tools Offered by 


Where should a credit manager be in a company?

Back in 2000, I had the opportunity to illustrate this point to a long-term client. At that time, I held the position of Chief Underwriter for the world’s largest provider of trade credit insurance here in North America. One of my visits took me to Florida. The CEO of this relatively large and growing jewelry manufacturing company asked me a simple question as he knew that I had visited scores of companies over the years. During the wrap-up session, he asked: where should the Credit Manager be positioned in this organization?

My response, “your Credit Manager should sit on your Board.”

The broader management team seemed a bit surprised by my response, so I began to ask them a couple of questions.

  • if your #1 sales producer brings in the deal of the decade and the Credit Manager says “no” because his/her assessment indicates that risk of non-payment is too high and unacceptable; who takes the heat for the lost sale?
  • if your #1 sales producer brings you the deal of the decade and the Credit Manager says “yes” and the debtor ultimate defaults, who takes the heat for the bad debt charge-off?
  • if your sales organization proliferate the credit department with challenging deals and the organization's DSO is extended adversely affecting cash flow, borrowing capabilities, collection & legal costs, etc., who takes the heat for the impaired cash flow and additional cost to fund operations?

We had some additional exchanges, but clearly, the management team understood my point regarding the importance of having a professional Credit Manager in that role.

I had known the CEO of this company for many years and I reminded him that when he started the business, he wore multiple hats; CEO, CFO, Sales Director, Ops Director, Credit & Collection Manager, HR Director, etc. Effectively, each hat represented a Board level position. As his enterprise grew, he brought on professionals within each discipline. I asked him who he thought today most closely emulated his efforts and responsibilities during those formative years? He responded; “Dave, my Credit Manager.”

When I asked the CEO what his main reasons for investing in trade credit insurance more than 10 years earlier, he provided a straightforward response. To paraphrase- I used the policy to help with my bank line as they advanced at a higher rate if my receivables were insured. However, the real driver was sales associated with the credit lines I offered our customers in which I could be more aggressive. Also, at that time I didn’t have the resources to staff a deep credit department, and it was more cost-effective to rent one.”

The story didn’t end there.

“Dave” the Credit Manager approached me after the meeting and thanked me for my assessment and personal insight. He confided in me that he always believed that the CEO utilized trade credit insurance as a hedge against his capabilities and always viewed it as a personal threat. Each year he would recommend against continuing to acquire the credit insurance policy. He believed credit insurance was best suited for companies with weak trade credit management.

This was the first time “Dave, the Credit Manager” had ever heard anyone speak from the trade credit insurance sector being so supportive of the Credit Manager role and the fundamental need of sound credit & collection management. He never thought about how the services associated with the trade credit insurance provider would be effective beyond the obvious indemnification of a loss which he never expected would occur under his watch. He never considered how this external company was a partner in trade credit, risk management, and asset utilization. A partner fully committed to helping alleviate his “stress” and to optimize the very important decisions he and his team took every day.

More than a partner, his trade credit insurance company was a fully integrated resource that brought thousands of additional manpower to his team; globally positioned in the management of credit risk, sales growth, debt recovery, and operational effectiveness. A partner with a local presence, expertise in the legal systems, cultural & language differences, economic insight, customer information, broad analytics, etc.

He now looked at his challenges of running his under-funded, under-staffed, under-appreciated, and overstressed credit & collection department from the perspective of his CEO. The trade-credit insurer was an ally of the Credit Manager and his team, not a threat. The CEO was making the decision to invest in trade credit insurance on the basis that it represented the most cost-effective and cost-advantaged solution for the organization.


A Believer in Credit Insurance

“Dave, the Credit Manager” became a believer that day. No longer feeling threatened, he was now emboldened to more comprehensively utilize the services and resources of his trade credit insurance partner to drive top-line growth, improve DSO, maximize working capital utilization and protect the company’s cash flow, earnings, and capital.

Dave called me a few months after that meeting on a cold day in January 2009 to tell me he had been promoted, received a nice raise, and found his stress level a bit lower. It was still high, but the perils of being a competent Credit Manager can never be eliminated because all risks can never be eliminated… only mitigated and managed.

More importantly, he became a creative user of the services provided by the trade credit insurer while addressing more complex issues as the company continued to grow and his sector became challenged. Together they worked on solutions such as pseudo-PUTS, transactional supported L/Cs, pre-payments, leveraged risk sharing, and consignment transaction.

Fast forward 20 years, Dave would ultimately rise to President of the company, and he remains a strong advocate of trade credit insurance. His company is publicly traded with a very strong balance sheet and P&L. While the founder and Dave’s reasons to utilize trade credit insurance evolved over the years, its value and the cost benefits they realize remain unchanged.


We offer unbiased credit insurance specialists that find you the best credit insurance provider.

Call +1 (814) 430-3848 


Learn More:

Contact a Professional

Want to speak to a professional about your Credit Insurance needs?

Subscribe to Our Blog

If you would like to be notified when new blog articles are added, fill out the form below

* indicates required


Borrowing Calculator

See how much more you can borrow by having Credit Insurance.