Introduction

Credit Management Meaning: Credit management is the process of granting credit, setting credit terms, monitoring credit activity, and collecting overdue accounts. Credit management helps to ensure that a company's credit risks are managed within a desired level of risk tolerance.

Credit Manager

A credit manager is responsible for managing a company's credit policies and procedures. They review customer credit applications and analyse the amount of credit to be extended. They establish credit limits and set payment terms to ensure that the company's credit policies are adhered to, minimising credit risks and managing bad debt.

Credit management services also include reviewing customer accounts, analysing customer data, and establishing credit limits and payment terms. They may also work directly with customers to resolve payment or credit issues and negotiate payment terms.

If you have a passion for numbers and a keen eye for detail, why not study credit management online and take the first step towards a rewarding career in the field?

Typical duties and responsibilities overseen by credit managers at a variety of levels include the following:

• Analysing credit data and financial statements of potential customers
• Setting and monitoring credit limits for customers
• Evaluating customer creditworthiness and granting or denying credit
• Monitoring customer accounts for payment delinquencies
• Facilitating the collection of past-due accounts
• Investigating and resolving customer disputes
• Reviewing and approving credit card applications
• Negotiating payment terms with customers
• Expediting payment of overdue invoices
• Developing and implementing credit policies and procedures
• Identifying and mitigating potential risks
• Keeping abreast of changes in credit regulations
• Providing customer service support and advice
• Reporting on credit activities and performance

The work environment for a credit manager typically involves a combination of office, administrative, and customer service work. Credit managers work in a variety of settings, including banks, financial institutions, retail stores, and other businesses.

A typical day for a credit manager may include approving loan applications, reviewing credit reports, evaluating risk factors, and interacting with customers. They must also stay up to date on banking regulations and industry trends.

Credit managers must be detail-oriented, have excellent communication skills, and have the ability to analyse data. Additionally, they must be comfortable working with numbers and have strong problem-solving skills.

To become a credit manager with an established employer, you will typically need to have at least five years of experience in credit management, financial analysis, accounting, or a related field. You should also have a provable knowledge of finance, credit risk management, and banking regulations. Additionally, you should have excellent problem-solving and communication skills.

Professional certifications that can enhance the employment prospects of credit managers include the following:

1. Association of Credit Management (ACM) Professional Credit Manager Certification
2. Chartered Institute of Credit Management (CICM) Credit Management Qualification
3. Institute of Credit Management (ICM) Level 3 Diploma in Credit Management
4. Chartered Institute of Credit Management (CICM) Advanced Diploma in Credit Management
5. Institute of Credit Management (ICM) Level 4 Diploma in Credit Management
6. Chartered Institute of Credit Management (CICM) Professional Diploma in Credit Management
7. Association of Corporate Treasurers (ACT) Certificate in Credit Management

To become a credit manager, most employers require a bachelor's degree in finance, accounting, business administration, or economics. Additionally, experience in credit or lending and a strong understanding of risk management are often required. Depending on the employer, some may require a professional certification or a master's degree in a related field.

It is possible to be a self-employed credit manager without formal degree-level qualifications. However, you will need an appropriate educational background and evidence of your capabilities, in order to win the business of prospective clients.

The career path for a Credit Manager in the UK typically includes a progression from Credit Controller to Senior Credit Controller, then to Credit Manager and finally to Head of Credit. Average salaries for these positions range from £35,000 - £55,000, depending on experience and qualifications, with salaries for Head of Credit often exceeding £75,000.

There may also be opportunities to progress into related roles such as Credit Analyst, Risk Manager or Finance Manager.

Opportunities for credit managers to further their career prospects long-term include the following among others:

1. Obtain professional certification. Becoming certified in credit management can demonstrate a commitment to the career and help set a credit manager apart.
2. Develop technical expertise. Credit managers should stay up to date on the latest industry trends and technology advancements, as well as developing a strong understanding of credit risk management.
3. Network. Developing relationships with other credit managers and professionals in the industry can help a credit manager stay informed and stay ahead of the competition.
4. Take on additional responsibilities. Demonstrating initiative and taking on additional responsibilities can help a credit manager stand out.
5. Pursue additional education. Pursuing an advanced degree in finance or business can provide a credit manager with additional insights, knowledge, and skills.

Individuals who become credit managers have the opportunity to consider a broad range of alternative job roles and titles, including the following:

• Commercial Credit Manager - £45,000-£65,000 per annum
• Risk Manager - £50,000-£90,000 per annum
• Financial Analyst - £45,000-£55,000 per annum
• Credit Analyst - £40,000-£55,000 per annum
• Corporate Banker - £50,000-£70,000 per annum
• Loan Officer - £35,000-£45,000 per annum
• Accounts Receivable Manager - £30,000-£45,000 per annum
• Credit Controller - £35,000-£55,000 per annum
• Account Manager - £40,000-£60,000 per annum
• Financial Planner - £40,000-£60,000 per annum

Credit management can be a highly rewarding career path to pursue, opening the door to such benefits as the following:

• Variety of career opportunities: Credit managers in the UK can work in banks, credit unions, financial institutions, retailers, and even in government departments. This means that there is a wide range of opportunities for career progression and job satisfaction
• Good salary: The average salary for a Credit Manager is £48787 per year in the United Kingdom, increasing to £60,249 per year in the London area.
• Job security: As credit management is an integral part of any business, credit managers have a good level of job security.
• Professional development: Credit managers are able to stay up-to-date with the latest industry trends and regulations through attending regular training courses and seminars. This ensures that they are always at the top of their game.
• Networking opportunities: Credit managers often work closely with other professionals in the banking and finance industry, which can be a great way to build contacts and gain insights into the sector.