How Credit Managers Spend Their Time

How Credit Managers Spend Their Time

Credit managers approve credit for new customers before a sale is made. This means investigating whether a customer is worth selling to and determining the terms under which they'll agree to pay their bills. At the other end of the sales process, credit managers are involved with collections. They make sure that accounts are paid on time. In severe cases, where customers default or go into bankruptcy, they may also be involved in legal proceedings to recover as much as they can. This may be just a few cents on the dollar.

This is a summary of how credit managers allocate their time. A sample group tracked their time and activities using our electronic TimeCorder system for two weeks. Each individual tracked 26 activities. Following is a list of the activities grouped into various categories. The average number of hours spent by the credit managers appears beside each activity name.

Following is a breakdown of activities and times:

Customer Service	Hours/Week
Collections Complaint resolution Customer meeting preparation Customer service meetings Networking Activities	5.7 1.0 0.7 1.2 0.8
Analysis	Hours/Week
Approve new credit applications Forecasting Legal Issues Receive new credit applications Review customer credit recommendations	3.0 0.2 0.7 0.8 5.5
Managing People	Hours/Week
Coach staff, provide direction Management Meetings Staff / operational meetings	1.0 0.8 0.1
Planning	Hours/Week
Meet / communicate with manager Planning - personal schedule	0.5 0.7
Administration	Hours/Week
Filing Fire Fighting General administration / paperwork Internal Correspondence IT / Computer systems issues Other internal phone calls Reading Write / review reports	0.6 1.2 5.6 1.8 0.8 0.6 1.7 1.5
Other	Hours/Week
Travel Miscellaneous business activities	0.2 4.0
Personal	Hours/Week
Lunch, breaks, personal business	4.8

The overall picture for the credit managers in our study is actually quite good. Overall, they typically work 45.5 hours per week, including lunch and breaks. This is about the same as other employees in our extensive database, who average 45.2 hours per week.

Based on the categories we established, here's how the typical credit manager's time breaks down.

We've arbitrarily called the first major category "customer service". Of course, that's not what delinquent accounts might call it, since collection calls are included here. These types of calls, along with paperwork, are the largest single activity, taking up 5.7 hours per week. There are 31 collection calls of about 11 minutes each making up the total. That"s a good chunk of time spent on what credit managers call negotiating and what customers call begging, bugging and badgering.

Activities related to analysis make up 10 hours per week, almost the same as customer service. Within this, reviewing recommendations regarding credit for existing customers represents 5.5 hours per week. Much less than that, 3 hours per week, is spent on new credit applications. (If you could just get the right customers to begin with!)

For our sample group of credit managers, providing direction to staff is not a major part of their job description. So managing people is only about 2 hours per week. More senior managers would spend a greater percentage of time on people issues, policy, strategic planning and executive matters.

One area where credit managers are slightly deficient is in planning. For instance, they only spend about 8 minutes a day on planning their personal schedule. Others in our database average 16 minutes per day on this activity, though even this is low. Everyone could use a bit more time to better prepare themselves for the daily onslaught of tasks.

On the other hand, administration can be a big drag on just about any job. It's no different for credit managers. 28% of the time is spent on these non-priority items. This is above the average of only 20% for most employees. So if there was an area for improvement, this might be it. Credit managers might be high by 4-5 hours per week in this category. Why? It's largely general administrative paperwork. This is a whopping 6 hours per week, more than an hour per day! And it's also a lot more time than the credit managers would like. In a questionnaire, they told us they'd like to spend just 2 hours per week on paperwork versus the 6 hours they actually do.

The "Other" category reflects that fact that our sample of credit managers had responsibilities that weren't included elsewhere. Altogether, 9% of the time spent here is not too high. Usually it's 3-7% of the week. The last piece of the pie shows that lunch and breaks are about average: 1 hour per day.

Looking at the pie chart, the activities on the right side are what we call "A" and "B" priorities. These account for 50% of the time, which is average. Top performers spend closer to 60% of their time on high priority A's and B's. The best way to do this is to reduce administration time.