As we approach the end of 2022, planning is well underway for 2023 at most organizations. To find out what credit departments are focused on and the challenges that will be dominating their agendas next year, Credit Today polled our ListServ members.
It came as no surprise that Slow Payments/Collections, Risk Mitigation/Portfolio Management, and Economic Factors/Inflation were ranked as the top three challenges from a list of nine items. When asked to spell out the challenges specific to their organization, however, three of the lower-ranked issues, Staffing/Employment Issues, Process Improvement/Automation, and Training/Professional Development were much more prevalent in the discussions. Please continue reading to see these results and a sampling of what our 19 participants had to say:
2. Please share with us the one or two biggest challenges your credit organization will face in 2023. Why will each challenge pose such a problem? How are you planning to overcome these specific challenges?
Most of the responses to this question fell into one of two categories: those dealing with staffing and/or automation issues, and those burdened by the economic situation and the need to mitigate risks. There was also a smattering of other issues of a more specific nature. Here's what the survey participants had to say about their biggest challenges going into 2023.
Staffing and Automation
We will face a staffing issue in 2023, we have open positions that we are trying to fill. Also, we need to have automation of certain procedures so the staff that we currently have has more time to focus on other projects. We have started to look at different tools to assist us in automation, but the problem of time affects how much time we can spend on reviewing and implementing those tools as well, so it is a vicious cycle.
-Sonya Cousins, Credit & Collection Supervisor, Zippo Manufacturing
I have two new employees starting 11/21/22. Neither has ever done any B2B Credit. We went live on a new ERP system on 6/27/22. It has been a disaster.
-Dave Zahller, CCE, Credit Manager, Tubular Steel, Inc.
Customer portals. Time and effort it takes plus some cost us real money. We deal with them the best we can. Implementing a new ERP system (Microsoft D365 from Microsoft AX). Expect to go live on April 1.
-Chris Finch, Director-Credit, Sumitomo Electric Lightwave Corp.
1: Slow Payments: We are in the process of installing GetPaid, with the intention of helping us better identify slow-paying accounts. 2: Training Staff to utilize Get paid to its fullest and broaden Credit Knowledge.
-Michelle Wilson, Credit Manager, BEGA US Inc
Finding the right candidate to fill a new collector role due to increasing past-due balances.
-Rob Richardson, Director Of Credit, The Corken Steel Products Company
2023 is the year I plan to retire. Ensuring a smooth transition is my biggest goal. System changes are expected around year-end 2022 which will require manual monitoring of multiple systems.
-Michele Pancotto, Credit & Collection Manager, Radiant Road & Rail Inc. (formerly Clipper Exxpress Co)
Coordinating with sales in a turnover and attempting to train sales in the world of credit. We will continue to coordinate with trainers as well as repeat the information daily. Facing growth with enthusiasm. Growth equates with an increase in workload without adding staff until stable. The motivation of the team and spreading the responsibility among all.
-Anonymous
Economy and Risk Mitigation
Our biggest challenge is monitoring our portfolio in regard to the risk associated with economic factors such as inflation. This inflationary environment is new to most of us and we really don't know how it will affect our customers. We are trying to manage by keeping closer tabs on our customer's debt and payment trends.
-Stu Sturzl, Sr. Credit Manager, Sargento Foods Inc
How to maintain a consistent collection of AR through growing economic uncertainty and with a changing demographic environment. Plan to overcome: consistent and early contact with customers and credit updates to identify problems and risks earlier.
-Cassandra Hegg, Credit Manager, Montana Silversmiths
Macroeconomic factors include inflation and interest rates. This equates to a more difficult environment with risk mitigation.
-Milton Barnes, Revenue Assurance Manager, Sun Chemical Corp
Potential bad debt issues. Interest rates are high. Monitor accounts closely.
-Gerry Beckett, VP Finance & Credit, Toyota Tsusho America
Some of the challenges I believe my company will face are a slowdown in payments and possible account closures due to economic factors/inflation. With rising inflation, many people will not be traveling or going out to eat as often as they do now. That will put a strain on our cash collections and bad debt expenses in 2023.
-Tracie Harris, Senior Manager, Order to Cash, illy Caffe North America, Inc
Other Challenges
Planning to go into a new distribution model in addition to our current one - the new model targets larger companies that present chargeback challenges and higher exposures.
-Michael Teixeira, Executive Vice-President, Black Diamond Group
The biggest problem is the lack of communication. Customers are not responding to phone calls or emails. Another issue is getting a customer to update their purchase order with the correct price. Our prices fluctuate with the metal market at the time of shipment. Customers are also wanting to push their Paydex out to between 90 and 120 days.
-Charmaine Lester, Credit Manager, Fusion Incorporated
Survey Demographics
