Net 30 Blog

The Importance of Credit Groups in a Down Economy

February 22nd, 2009 by Alex Coté

Over the last few weeks I have had the opportunity to participate in an industry credit group meeting both in the United States and in Europe. In both cases, the importance of these meetings was clear given the challenging economic environment. While attendance is down at some these meetings because of the well publicized cuts or complete freezes in corporate travel, I was still impressed at the level of continued participation and attendance. It is refreshing to see that senior management is still supportive of these meetings.

Are you getting pressure to cut back on these meetings? Is upper management questioning the value, given budget cuts in other areas? Here are some tips and benefits to help you justify attendance.

Key Benefits of Participation in a Credit Group

Transfer knowledge, new strategies, tips and best practices

With collections activities up significantly and disputes on the rise credit groups provide the perfect setting for sharing best practices and successful credit, collections and risk management techniques (both new and old)
Outside experts can also provide unique insights and additional support that are often more expensive to obtain for a single company (many experts will participate at no cost to promote their company or credentials to potential customers in the group). In my case I was invited last week to run a workshop and presented on Collecting in an Economic Downturn
Attendees often learn from their peers about the latest technology, information, and scoring products

Trade experiences

Providing your company’s monthly trade experience information to your industry credit group (and all commercial credit bureaus) provides better transparency and has been shown to improve payment behavior
Submitters often receive additional services such as credit scores, delinquency predictor scores or unique identifier information at no cost in return for providing their A/R experience
In a live and confidential setting, sharing past facts on your experiences with customers provides unique commentary not found on a generic credit report
Members benefit from the collective credit investigation capabilities of the entire group and their respective departments
Benchmarking and industry trends, like those provided by Cortera, help members understand their performance versus their peers

Relationship building

Long-term support of these groups builds invaluable relationships with your peers that helps protect the entire industry against fraud and frequent late payers
Member sharing also helps build better information and technology solutions that are specific to the trade group

Member alerting

The peer-driven, member alerting services provided by most credit groups are essential for communicating between meetings and ensuring the immediate flow of potential industry or customer risk. These services are only available to group members and cannot be purchased if you are not an active member
Meeting hosts further expand this communication through delivering timely industry news, best-practices, and company-level insights to ensure regular knowledge transfer back to the credit group

Lowering Travel Costs

Attend local regional meetings. These are often off-shoots of the national meetings and provide helpful member experience both locally and nationally
Encourage members of the credit team to attend in their region and communicate to the national or global team
Host meetings at your facilities to avoid hotel expenses
Participate via conference call if you cannot attend in person

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