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Creative Ideas Solve Credit Risk Problems - How One Credit Manager’s Cre¬ativ¬ity Made the Big Sale Possible

posted on 2014-07-16 by Dean Kaplan

Most credit man­agers have been in this sit­u­a­tion: the com­pany wants to make the big sale, the buyer is ready, but their credit sit­u­a­tion doesn’t make a stan­dard trans­ac­tion pos­si­ble. Bud Rule, who has 40 years of credit expe­ri­ence, recently shared this story of a cre­ative solu­tion he used years ago.

Their com­pany was gear­ing up for the big annual trade show. A sales­man was work­ing with a dealer to place a large at the show. This was a long-term cus­tomer so every­one was happy. But, one prob­lem: the cus­tomer had shown slow­ness in repay­ment and the approved credit limit was not suf­fi­cient enough for the order.

Bud trav­eled to the trade show a cou­ple days in advance for a vari­ety of rea­sons, includ­ing to meet the cus­tomer face to face the day before the show started. The cus­tomer explained the unusual cir­cum­stances that resulted in their cur­rent predica­ment. Bud dis­cussed all the typ­i­cal meth­ods that the cus­tomer might use to gen­er­ate imme­di­ate cash or become more credit wor­thy, but noth­ing panned out.

Bud was under a lot of pres­sure to fig­ure some­thing out. Man­age­ment wanted the inven­tory sold. The sales­man wanted his com­mis­sion. And now a long-term cus­tomer was upset that he was being told “No” on a deal that would really help him.

Dur­ing the con­ver­sa­tion, he couldn’t help but notice the customer’s HUGE dia­mond ring. In a moment of inspi­ra­tion, he asked the cus­tomer if he was will­ing to put the ring up as col­lat­eral. They went out and got it appraised right then and Bud took it back and locked it in the com­pany safe. When the invoices were paid a few months down the road, Bud offered to fly back and deliver the ring. The cus­tomer was so happy with how things worked out that he flew to cor­po­rate to say thank you and put the ring back on his finger.

Bud told me “So many peo­ple look at the Credit Depart­ment as the ‘Sales Pre­ven­tion Depart­ment’. I’ve worked through­out my career to make it the “Assist Sales Depart­ment”. I’m sure many credit pro­fes­sion­als can relate to this.

Bud has had a long and quite pro­duc­tive career. At this stage, he is no longer look­ing for that high pro­file credit man­ager posi­tion and salary. He just wants to stay active (full or part-time) in the credit and col­lec­tion field. So any­one who could use a highly expe­ri­enced pro­fes­sional for daily rou­tine mat­ters or to help improve things, check out Bud’s pro­file on LinkedIn.

And a shout out to all AR pro­fes­sion­als: please con­tact me if you have a story where you have cre­atively solved a credit prob­lem. I want to share more exam­ples with our com­mu­nity so we can all learn from each other.