As the end of the year quickly approaches, I find myself reflecting on all that needs to be done before the holidays are in full swing. The to-do list seems endless: decorating, shopping, and preparing for family gatherings and festive celebrations. Every day feels like it’s speeding by, and it’s easy to get overwhelmed.
Of course, the best part of the season is spending time with family, friends, and colleagues, whether it’s at parties, family dinners, or, depending on your company, goodwill visits with customers. These moments are a reminder of what truly matters—connection and community.
In the professional world, it’s also a busy time. As credit professionals, we spend all year working on collecting outstanding balances, but as the year draws to a close, the pressure increases to resolve overdue accounts. Credit departments often intensify efforts to collect past due balances, with the goal of closing out the year on a strong note.
For credit managers, the year-end is also a time to carefully review the entire accounts receivable portfolio. Are there small outstanding balances that can be written off? Are there disputes that need to be resolved? Are there uncollectible finance charges? These minor items might not justify the extra time and resources required to collect, but they still need to be addressed.
If there are accounts placed with collection agencies or attorneys, a review is necessary to assess the status of each case. The credit manager will need to determine whether the balance is collectable or if it’s time to write it off as bad debt. It’s critical to be familiar with your company’s bad debt policy when making these decisions. Does your company have a bad debt reserve, and if so, what is the reserve amount? In some cases, discussions with upper management may be required before a balance is written off.
This time of year also presents an opportunity to evaluate your department’s performance. Are there areas for improvement? Would additional training or education help the team perform better? What steps can be taken to minimize loss, and are there any signs of potential fraud that need addressing? Reviewing and refining credit policies and procedures can help improve efficiency and effectiveness moving forward.
Additionally, as the year closes, many credit managers are tasked with preparing a budget for the new year. This is a time to consider several factors: How did the department perform this year? Is there a need for additional staff or resources? Are there costs associated with training and development? Is the department’s equipment still sufficient for the workload?
Despite all the tasks and responsibilities, the day-to-day operations don’t slow down. As I think about everything that needs to be done in the coming weeks, I know it will be a stressful period. But amidst the busyness, there will also be moments to relax and enjoy the holiday season with family and friends—reminding us that balance is key.
by Joanne Martin, CCE, LKL Associates