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All departments should work towards the same overall goal for the company Strategic planning can be appropriate for a large company, a department within a company, a smaller company and collection agencies.
This article is the first in a three part series and will focus on why you should develop a strategic plan for the credit department. Strategic planning is a good idea in any type of economy, but it can be particularly important and effective during tough economic times, such as what we are experiencing right now.
Strategic planning typically involves evaluating how things are at present, setting a longer-term goal and then determining what needs to be done currently and into the future to accomplish the goal.
You might be asking yourself, why do I need to create a strategic plan for my credit department? Well, there are several very important reasons why this is a good idea.
The first is that it is critical for every department to be in sync with the company as a whole. In the case of the credit department, strategic goals will likely involve controlling and minimizing credit risks, achieving a specified percentage of account receivable collections, etc.
Can the current staff handle this additional workload? Future hiring is just one aspect that may be impacted by long-term company goals. If the company succeeds in bringing in the forecasted number of new customers, and the credit department continues to do business as usual, will their staff be able to handle the added workload?
Will the current computer database be up to the task of the added data input and processing? If the answer to these questions is no, the credit department will be in catch up mode all of the time.
They will always be running one step behind. This is a catch 22 because not only will they be constantly behind the eight-ball, but there will be no time available for the department to figure out how to become more efficient and better able to handle the new demands.
This will result in lower productivity and morale.
Clearly, this is not a smart strategy for any department to follow. The final reason for the credit department to put together a strategic plan follows directly from the downward spiral just described.
In other words, companies are constantly on the look-out for ways to improve efficiency and productivity, all for fewer dollars spent. Usually this means that some functions are eliminated, while the responsibilities continue.
The responsibilities are absorbed by other ongoing functional areas within the company. The key for any department is to be a contributor to the bottom line, not a bottom line suck. Collection agencies can provide a great deal of support to a credit department, especially during growth spurts.
Building this into a strategic plan can help maintain efficiency and productivity, and hopefully add to the all-important bottom line.
The second and third articles will look at the specifics of developing the strategic plan — assessing the present, looking to the future, and setting action steps to get from here to there.The preferred format debt collection agency business plan template for investors, SBA, banks and angel investors in MS Word DOC format.
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