25 July 2011

While businesses are struggling to make any headway in the current wave of tough economic conditions, those businesses employing qualified credit professionals are seeing a marked improvement in overdue payments, according to new research.

A survey of 8,000 members of the Institute of Credit Management (ICM) has found that two thirds (67%) of them have seen an improvement in overdues (measured as Days Sales Outstanding or DSOs) compared with this time 12 months ago.

The figures appear to reinforce the arguments from such bodies as the Institute of Credit Management (ICM), which carried out the research, as to the importance of investing in professional credit managers and credit management practices to help improve a company's cashflow performance.

"Good credit management is an essential factor for businesses looking to maintain a healthy cashflow," says Philip King, Chief Executive of the ICM: "Employing professionals and/or up-skilling the credit department is really going to benefit a business that wants to survive and even grow," he says.

The survey showed that the average DSO for members was 58, with the lowest coming in at 12 and the highest 139, showing there still is a significant divide between the best and worst performing credit teams, and the best and the worst payers: "We will always look for ways to improve on figures like this," Philip concludes.

"Although our members have seen an improvement, credit skills development is only going to benefit businesses as a whole," Philip adds.