Credit Manager Job Description, Skills, and Salary
Get to know about the duties, responsibilities, qualifications, and skills requirements of a credit manager. Feel free to use our credit manager job description template to produce your own. We also provide you with information about the salary you can earn as a credit manager.
Who is a Credit Manager?
A credit manager’s primary responsibility is to collect money owed for products or services. A business may hire this type of manager to keep track of accounts, negotiate payments, and participate in collection and legal actions as necessary in the event of non-payment. This type of credit supervisor frequently collaborates with banking institutions and credit bureaus to carry out her responsibilities. Additionally, this manager will safeguard her business by conducting research and avoiding risky credit situations.
While a credit manager’s primary responsibilities include issuing invoices, settling accounts, and tracking payments, most credit managers are also required to deal directly with customers and external organizations. The credit manager initiates any necessary collection actions and consults with lawyers and other parties involved in legal action if a customer’s payment is significantly delayed. Credit managers are typically required to provide documentation and reports outlining payment history and accounting details in the collection and legal situations. Additionally, this manager maintains routine contact with banks during the payment and money transfer processing process and conducts financial investigations using the resources of banks and credit approval agencies.
A credit manager’s responsibilities vary according to the size of the organization for which she works. At larger companies, these professionals may specialize in a particular area, such as collections, whereas at smaller businesses, they may perform a variety of credit-related duties, including general office duties. A credit manager may be required to supervise others and to develop and maintain appropriate credit and payment policies and procedures in both large and small businesses.
Additionally, the credit manager’s job is to protect her company from risky credit extensions; approval of credit is a critical component of this position. The manager conducts research and checks the backgrounds and payment histories of individuals and businesses to ensure that her company receives payments on time.
Throughout the workday, this manager communicates and networks with others via computerized devices, the telephone, and the mail. She will almost certainly issue statements and will also spend time tracking and following up on account payments. She may be assigned to special accounts or projects or may have a more general role within the organization. A credit manager may meet with senior management to develop, maintain, and evaluate company policies and practices. Additionally, she maintains relationships with individuals employed by banks, law firms, and accounting firms.
Credit manager jobs frequently involve strategically determining a consumer’s or commercial client’s creditworthiness. This strategy is frequently used in lending, and these positions are likely to exist in banks, automobile dealerships, retail establishments, and credit bureaus. Additional opportunities in this field may be available through credit card companies and corporations that provide goods or services. Certain credit managers may have accounting backgrounds, while others may specialize in risk management. Many of these positions require candidates to have a four-year degree in business, while others require candidates to have a Master’s degree in business or quantitative statistics.
Numerous credit card companies and lending institutions have checks and balances in place to ensure that a customer can repay a loan or line of credit. A component of this system verifies that the customer is employed and earning a sufficient wage. The other component is responsible for ensuring that his or her previous and current bills are paid on time. These facets are used to assess a customer’s creditworthiness. However, the credit manager is likely to make the final decision regarding credit extension.
Credit is frequently segmented into consumer and commercial lines. Consumer credit manager positions frequently oversee retail stores’ and credit bureaus’ credit operations. These individuals may assist customers in completing credit applications in small offices such as bank branches or car dealerships.
Commercial credit manager positions are frequently found in large lending institutions, where they make decisions affecting a corporation’s credit standing. These positions frequently conduct extensive credit history research before making lending decisions, as commercial credit lines can range in value from hundreds of thousands of dollars to millions of dollars. Managers are therefore likely to contact credit bureau agencies and bank officers to ascertain a company’s creditworthiness.
Accounting departments exist in some businesses to manage accounts payable and receivable. Credit manager responsibilities in this capacity may include monitoring collection efforts for past due accounts and enticing delinquent accounts to pay. Thus, related functions are likely to include tracking past-due accounts, establishing and monitoring payment plans, and referring accounts to external collection agencies for collection.
Numerous corporate accounting departments combine collections and accounts receivable functions. These credit manager positions may then be responsible for overseeing credit functions, including the application of payments to consumer accounts. They may be involved in balancing and preparing bank deposits, establishing and maintaining client records, and resolving complaints about accounts receivable discrepancies. Credit managers acting in these capacities may also approve client orders for release and consult with other managers regarding credit issues.
Risk management frequently seeks to maximize the rate of return while minimizing credit exposure. As a result, a credit risk manager is likely to be involved in quantitative risk analysis and reporting. This individual may employ software applications to assess a company’s statistical risks based on a variety of asset classes, lending strategies, and market interest rates. He or she may or may not be directly involved in the credit application processing process.
Credit risk management positions will almost always require a master’s degree in business administration or quantitative statistics. Credit manager requirements may include four-year degrees in business and professional experience in collections or accounting principles where less analysis is required. These positions will almost certainly require the ability to meet deadlines, supervise others, and communicate with a diverse customer base.
Credit Manager Job Description
Below are the credit manager job description examples you can use to develop your resume or write a credit manager job description for your employee. Employers can also use it to sieve out job seekers when choosing candidates for interviews.
The duties and responsibilities of a credit manager include the following:
- Evaluating a prospective customer’s creditworthiness.
- Developing credit scoring models for risk assessment.
- Calculating and establishing interest rates on loans.
- Negotiating loan terms with new clients.
- Assuring that all loans and lending procedures adhere to regulatory requirements.
- Keeping track of all company loans.
- Loan payments and delinquent debts are monitored.
- Conducting a review and update of the company’s credit policy.
- Keeping an eye on all payments and bad debts.
- Consulting with clients regarding loan terms.
- Preparing credit reports for senior management and presenting them to them.
- Establishing and monitoring reasonable interest rates.
- Managing debt settlements and loan renewals through client communication.
- Credit policies should be updated and reviewed regularly.
- Discussing and agreeing on terms and conditions with new clients.
- Assessing and conducting due diligence on the client’s creditworthiness.
- Educating and guiding the sales team and their clients.
- Creating credit scoring models to forecast risks.
- Keeping track of all credit payments.
- Continuing to adhere to the corporate credit policy
- Creating a model for credit scoring
- Maintaining credit files for customers
- Monitoring and updating the credit-granting and credit-reporting processes.
- Accepting or rejecting the credit recommendations of the staff
- Investigating personally the largest customer credit applications
- Overseeing the program of corporate financing
Qualifications
When it comes to hiring credit managers, employers may have varying requirements. The following are some frequently used criteria:
Education
Credit managers typically require a bachelor’s degree in mathematics, accounting, business, economics, or a related field. A master’s degree in business management may help you qualify for senior positions, particularly in large corporations or multinational corporations, where the work is likely to be complex and high-volume. However, many banks prioritize experience over education.
Certifications
Earning a credit management certification demonstrates your commitment to the field and desire to learn more. Certain employers may even require specific certifications when hiring. The National Association of Credit Management offers a variety of professional certifications. Six formal designation certificates and three specialist certifications are available:
- Credit Associate
This introductory certification program is comprised of three courses (business credit principles, fundamental financial accounting, and financial statement analysis I), as well as a final exam. The CBA program has no prerequisites.
- Certified credit and risk analyst
Additionally, this option requires no prerequisites and focuses on financial statement interpretation and risk assessment. It consists of three courses: Financial Accounting Fundamentals, Financial Statement Analysis I, and Financial Statement Analysis II: Credit and Risk Assessment.
- Business Fellow’s credit
This designation requires completion of two courses: business law and credit law, followed by work toward earning career accomplishment points and passing an exam. To participate in the CBF program, you must already hold a CBA certificate.
- Experience
A credit manager is a position in the middle management hierarchy. This means that, while experience requirements vary by employer, the majority expect candidates to have demonstrated credit management or credit analyst experience. One route to this position is as a credit assistant, then as a credit analyst, and finally as a credit manager. Summer internships with banks or other finance-related organizations may also be beneficial for aspiring credit managers.
Prior management experience may also be advantageous when applying for positions in credit management. This demonstrates a willingness to assist in the management of others in your department, in addition to the skills required for your duties. When hiring for this position, some employers may look for leadership, teamwork, or management experience.
Essential Skills
- Financial Intelligence
Understanding the fundamentals of construction finance is critical for a variety of reasons. Collections for large businesses are complicated, even more so when dozens (or hundreds) of accounts are involved. Financial knowledge puts the credit manager’s job of collecting individual accounts into context and enables more informed decision-making.
- Adaptability
Credit management requires innovation to assist customers in resolving their debts. A resourceful manager will go above and beyond to assist customers with their obstacles, resulting in a smoother and faster payment process.
Collections encompass much more than phone calls and letters. Receiving payment can easily devolve into a cat-and-mouse game (or vice versa). Effective collections necessitate a delicate balancing act and orchestration of various communications.
- Charisma
Credit and collections management are on the front lines when it comes to relationships. They are the ones who interact with customers daily—via phone, email, and possibly in person.
Charisma is thus a critical personality trait for a credit manager because accounts receivable and accounts payable do not naturally generate the most exciting relationships. It’s difficult to continually ask for money (and to be asked for money).
How to Become a Credit Manager
- Acquire a degree
A Bachelor’s Degree in Business or a closely related field is typically required to begin your Credit Manager career path and remain a competitive option for employers. Concentrate on developing industry-specific skills throughout your education to ensure that you are adequately prepared when applying for entry-level positions and entering the workforce. Before entering the workforce, a Credit Manager internship may be required to earn your Bachelor’s degree and acquire necessary on-the-job skills.
- Select a Field of Specialization
You may be required to choose a specialty within your field as a Credit Manager. Determine which area of the Credit Manager field you are most comfortable with and continue to take proactive steps toward growing in that area.
- Acquire an Entry-Level Credit Manager Position
After earning a Bachelor’s degree in business or a closely related field, you’ll typically start your career as an entry-level Credit Manager. In general, you can pursue a career as a Credit Manager after earning a four-year Bachelor’s degree in a related field.
- Advance Your Career as a Credit Manager
Following the entry-level position, there are several Credit Manager career paths to pursue. As an entry-level Credit Manager, it may take two years to advance to the next seniority level position. To advance in your Credit Manager career path, each advanced Credit Manager position requires approximately two years of experience at that level. To advance your Credit Manager career path, you may need additional education, an advanced degree such as a Master’s Degree in a related field, or special certifications.
Not all industries and employers require continuing education to advance your Credit Manager career. Earning this degree, on the other hand, may help you advance to higher-paying positions more quickly. A Master’s degree in business can take up to four years to complete.
Where to Work as a Credit Manager
Credit managers are frequently employed by banks, trust companies, and credit unions. Additionally, they may work in credit departments for industrial or commercial organizations such as utility companies, automobile dealerships, department stores, and insurance companies.
Credit Manager Salary Scale
In the United States, the national average salary for a Credit Manager is $59,734 per year.
