Investing in the Credit Department function

Many people argue that University graduates cannot hope for a well-paid managerial job until they have gained some experience in their chosen career path. That may well be true, but likewise experience alone cannot guarantee that well-healed position either.

Experience alone may not be adequate to maintain a position of responsibility and authority. Certainly, the combination of knowledge, skill, ability and experience is the best recipe for career success.

Recently, the government put forward a draft for a National Action Plan on Employment with a view to develop more and better jobs for all. Commenting on this national plan, Employment Minister Louis Galea described efficiency, skills and an inclusive labour market as the bedrock of social and economic growth, and as essential if the Lisbon target of making Europe the most competitive, dynamic knowledge-based economy by 2010 is to be met.

Looking at the vision of the plan, lifelong learning through education beyond school or University while learning 'on the job' will ultimately bring rewards both to the business community as well as to the individuals employed by these businesses more than ever before.

The credit management function is by no means an exception. Business is changing, and therefore the way business is done should also change. Trade credit has become an important element to gain competitive advantage in today's dynamic business environment.

Nowadays, people employed in the credit department have an important role to play. They aim to achieve a high volume of profitable sales with possibly no or few bad debts, ensuring sound cash flow management while building a long-term business relationship with their clients to retain customers.

Additionally, they should be competent in the relative legislation, which is also changing, and be able to analyse, review and control credit accounts and the clients applying for credit.

But, in reality, who is currently being employed in Credit Departments? University graduates with no experience in credit management or experienced people in the field of credit management with no academic background in the subject?

In the majority of cases, it is either one or the other. Unfortunately, in Malta, credit is usually described as one of the roles of the financial controller.

But credit management is both a science and an art in its own right, a business function which is becoming increasingly important to all businesses as more credit is being granted to increase market share.

Facts show that, very often, Maltese organisations selling on credit entrust 'debtors', one of their key assets, in the hands of inexperienced or unqualified personnel. The Malta Association of Credit Management (MACM) has felt the need to introduce accredited qualifications in Malta specifically addressing the needs of the people working in the field of credit management, irrespective of the commercial sector they are trading in, developing the right knowledge, skills and qualities that a truly credit professional should have.

MACM, the local co-ordinators for the Institute of Credit Management (ICM) of the UK in collaboration with MCAST - Institute of Business and Commerce will be running a part-time course leading to the ICM Certificate/Diploma, a qualification designed to give the best possible foundation on which to build a career in credit management.

Credit management has long fallen into three main categories: trade, consumer and export. The divisions between trade, export and consumer are emphasised by the legislation surrounding trade and consumer.

So, the ICM has long believed in the value of an all round grounding in credit management and the education syllabus for students studying for the ICM qualification is designed to cross all these divides and the ICM qualified credit manager can then look to broaden his or her horizons.

The ICM Certificate in Credit Management comprises introductory credit management, accounting, business law and business environment. Each of these four compulsory units is assessed separately, and develops in the student a basic understanding of credit management across the full range of credit environments.

Fundamental accounting principles and some broad understanding of the legal context and structures in which businesses operate, together with the national and international context of today's global economies. Success in these units, coupled with the development of good management practices, readily equips the credit manager with the basic tools to do the job.

On the successful completion of the ICM Certificate, then being an Associate of the ICM, the designatory letters AICM (Cert.) can be used.

The successful candidate in the Certificate in Credit Management may then proceed to achieve the more demanding Diploma in Credit Management. Comprising as it does advanced credit management, credit management law, legal proceedings and insolvency and a practical credit management project, the diploma is the definitive credit management qualification.

Increasingly prospective employers are looking for qualified practitioners, and it is worth noting that over half the membership of the ICM is now made up of students, studying at colleges throughout the UK.

MICM (Grad), the qualification for successful Certificate and Diploma candidates, is much sought after, and is the model for credit management schemes in a number of countries. It is hard work, but the end result pays great dividends in both status and reward, and should be viewed by both employer and employee as an investment in the future.

It is an investment to be strongly recommended.

Through the MACM, prospective students can now study and sit for the ICM examinations in Malta. Students need to register through MACM for membership with the ICM. MACM is currently receiving students' registration forms.

Mr Busuttil is the administrator of the Malta Association of Credit Management. For more information about the ICM qualifications contact the MACM on tel: 2142-3638/9 or e-mail: jbusuttil@macm.org.mt.